Mon May 16, 2011 By Andrea Shalal-Esa Reuters
WASHINGTON- Lockheed Martin Corp (LMT.N) says it hopes to sign sales contracts for up to 18 F-16 fighter jets to both Iraq and Oman by early 2012, and expects to book a total of about 100 additional orders by the end of the decade.
Lockheed is gradually winding down production of the popular multi-role fighter, which is in use by 25 countries worldwide, and was once produced at a rate of one a day, as it ramps up production of the new F-35 Joint Strike Fighter.
The company has delivered 4,475 F-16s and has a backlog of 65 orders, which means production at the company's Fort Worth, Texas plant will continue at the current rate of one to two planes a month for several years.
Lockheed had hoped to sell hundreds more F-16s to foreign militaries in coming years, but India last month eliminated both the F-16 and Boeing Co's (BA.N) F/A-18 Super Hornet from a competition to provide 126 fighters, and a possible sale of 66 planes to Taiwan has been on the back burner for some time.
The Pentagon's No. 1 supplier by sales, Lockheed is finishing work on 24 single- and two-seater F-16 fighter jets for Morocco at the Fort Worth plant, and will deliver those airplanes in August.
Bill McHenry, Lockheed's head of F-16 business development, said the company is still pursuing some possible additional F-16 sales, as well as upgrades to existing planes for the U.S. Air Force and other countries that would extend their service life from 10,000 flight hours to around 12,000.
Lockheed says it currently conducting a full-scale durability test on an advanced F-16 Block 52 plane as part of the Air Force's deliberations on possible upgrades, especially given an expected delay in the fielding of the new F-35 after a restructuring added time to that plane's development program.
India's decision to eliminate the F-16 from its $11 billion fighter competition dashed the company's hopes for another big order, said Richard Aboulafia, analyst with the Virginia-based Teal Group. [ID:nL3E7FS3KJ]
"The great plane ends not with a bang, but with a whimper." he said, noting that the F-16 was the most popular fighter in the world given its ability to attack other planes, targets on the ground or on the seas, and to engage in electronic warfare -- all for a price of $30 million to $40 million.
"Ironically The only thing that can save the F-16 now is a disastrous F-35 program," he added, referring to the F-35 fighter plane which is also built by Lockheed to replace the F-16 and a dozen other warplanes worldwide.
Taiwan has expressed interest in buying up to 66 F-16s, but the deal has floundered for political reasons as the U.S. government struggles to balance its ties with Taiwan and its military ties to China, Aboulafia said.
"The only possible last hurrah would be Taiwan," he said.
The Pentagon's Defense Security Cooperation Agency notified lawmakers last year about possible sales of 18 F-16 fighters to both Iraq and Oman, but both sales have been delayed.
The U.S. military wants Iraq to get the new fighter planes, particularly given plans to withdraw U.S. combat troops from the country, said one government official who was not authorized to speak on the record.
But Iraq announced in February that it would delay the purchase of the new fighter jets to put $900 million of allocated funds into its national food ration program instead.
The United States formally ended combat operations in Iraq last August but maintains 50,000 troops in the country to help its fledgling military tackle Islamist insurgents. American troops are scheduled to pull out at year's end.
(Reporting by Andrea Shalal-Esa; Editing by Phil Berlowitz)