Thursday, Sep 17, 2015

Renton, Washington: Boeing Co. is bringing two of its newest military surveillance aircraft to the Dubai Airshow this November in a push to drive up international sales.

The United States aerospace company will be bringing its P-8 Poseidon, a military version of its 737 airliner, and the still-in-development Maritime Surveillance Aircraft (MSA), a military modified Bombardier Challenger.

Boeing has sold 62 P-8s so far but mostly to the US Navy with eight orders booked each from India and Australia. Boeing sees the P-8 as a replacement aircraft for the Lockheed P-3 Orion that was first introduced in the 1960s. Boeing believes there is potential for at least 75 international sales.

Boeing will be flying a P-8 that is used by the US Navy and its prototype of the MSA, according to company executives speaking to reporters on Wednesday on a company funded media visit to Seattle, Washington.

Boeing believes there is appetite in the Middle East for both aircraft and said some regional governments are interested. Bob Schoeffling, a senior manager from the MSA programme, said Boeing is also in talks to test the MSA with regional militaries while the aircraft is in the region.

Boeing is looking to the Middle East to drive up defence revenues as the US government cuts back its military budget and other international defence spending remains static.

Chris Chadwick, President and Chief Executive Officer of Boeing Defence Space & Security (BDS), told reporters on a video call that he expects the Middle East to account for a “significant amount” of its international revenues, which he expects to account for between 30 and 35 per cent of the defence business in the coming years, up from 25 per cent today.

Saudi Arabia, the Middle East’s largest economy, nearly doubled its military spend from 2011 to 2014 when it spent $80.7 billion, according to the Stockholm International Peace Research Institute (SIPRI).

The UAE spent $13.4b in 2014, $5.7b less than it did in 2011, but the country is expected to increase its military budget in the coming years. In February this year, the UAE announced it signed $5b in military deals at the International Defence and Exhibition & Conference (Idex) in Abu Dhabi.

The Middle East’s increasing political fragility is expected to drive up regional military spend despite the sustained drop in oil prices that are a major revenue source for many regional economies. Saudi Arabia and the UAE, along with other countries, are fighting together in Yemen and are also part of the air strikes campaign against Daesh in Syria and Iraq.

“There is tremendous activity from a threat perspective and all that has done is kept the pressure to evolve capabilities in the region,” Chadwick said.

Boeing is hoping to sit down with many of its Middle East customers at the Dubai Airshow. “I’m really looking forward to it. We have a lot of friends in the region,” Chadwick added.

He also confirmed Boeing is still in talks with at least two Middle East customers for “more than 20” Ch-47 Chinook helicopters.

“The downturn in oil prices has not affected the appetite of our customers in the Middle East,” he said.

But the booking of any military orders in the Middle East is likely to be followed up with more regional joint ventures and partnerships.

Boeing regional partnerships have so far included the United Arab Emirates and Saudi Arabia to manufacture goods and provide support locally for commercial and military aircraft.

There is “tremendous demand” from Boeing’s Middle East customers in providing support services and creating local jobs, Chadwick said.

He added that he is “very bullish” on selling the F-18 Super Hornet to Kuwait despite reports the country has opted for the Eurofighter Typhoon fighter jet built by the European consortium Alenia Aermacchi, Airbus Group and BAE Systems.

“We still believe the door is open,” he said.

By Alexander Cornwell Staff Reporter

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