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About this study/key findings:
This is a strong market. Last year (2006) was the best year for the fighter market since 1992, a post Cold War peak. Some 281 aircraft worth $18 billion were delivered, a strong recovery from the doldrums of 2000-2002, when annual deliveries averaged $7 billion. Our numbers include only production, and exclude RDT&E and modification money.
This year will see strong numbers too, with 308 deliveries worth $16.3 billion, another post-Cold War peak. This relatively “frothy” market won’t be exceeded during our forecast, but we expect continued strong numbers, led by US and European domestic procurement. Average annual deliveries will be $15.7 billion, just below the current peak.
We forecast production of 2,946 fighters worth $157.5 billion (in 2007 dollars) between 2007 and 2016. For comparison, a total of 2,525 fighters worth $118.9 billion (also in 2007 dollars) were built between 1997 and 2006. This represents 32% value growth.
Since Europe’s procurement holiday lasted longer, Europe’s market share will increase, as Eurofighter and Rafale series production ramps up. Europe’s share will grow from 23.9% in 1997-2006 to 33.2% in 2007-2016. However, this does not reflect export market success.
The F-35 program looks increasingly solid and successful. That, coupled with an activist foreign policy, will allow US industry and its international allies to dominate this market after 2014. The next 5-7 years are effectively Europe’s “window of opportunity” to export fighters or create new alliances to forestall US market dominance. Meanwhile, the US needs to prevent major F-35 cost increases.