"This aircraft is becoming an absolutely brilliant workhorse for the RAF, in terms of bringing men and material into a warzone such as Afghanistan, but also in evacuating civilians in times of need," the prime minister told parliament.

"It is an important investment for the country and I'm glad to announce that we can make it today."

The Royal Air Force (RAF) currently has seven C-17s, into which military vehicles and cargo on pallets can be loaded through a rear door.

It is used to transport some of the 9,500 British troops stationed in Afghanistan.

Cameron's coalition government of Conservatives and Liberal Democrats announced deep cuts to the Ministry of Defence budget after it came to power in May 2010, blaming the previous Labour government for massive over-spending.

]]> Thu, 09 FEB 2012 09:07:15 AEST Geneva (AFP) Feb 8, 2012 - Swedish defence firm Saab will cut the price on its Gripen fighter jet to ensure that it wins a Swiss order after French planemaker Dassault threatened to undercut its offer, a report said Wednesday.

In November, Dassault lost out on a bid to replace Switzerland's ageing F5 fighter fleet when the Federal Council opted instead to buy 22 Saab Gripen planes for an estimated 3.1 billion francs (2.6 billion euros).

"The price will be less than 3.1 billion (francs), Saab's Switzerland director Anders Carp was quoted by the Swiss daily Tages-Anzeiger as saying.

Sources cited by the newspaper suggested the new price could be between 2.5 and 2.8 billion francs.

It is understood Saab wants to challenge a reported counter-offer by Dassault proposing 18 Rafale planes for 2.7 billion francs.

Dassault sent a letter outlining the proposal to the security commission of the Swiss parliament, which still has to approve the Gripen purchase.

The Swiss government must formally endorse the deal this month and it will then be sent to lawmakers for final approval later this year.

Saab has said Bern can sign the Gripen contract directly with the Swedish government which would act as a guarantor in the event of any difficulty in delivering the aircraft, Hakan Jevrell from the Swedish defence ministry told Tages-Anzeiger.

Last month, India announced it had selected Dassault as sole bidder to negoitate a sale of 126 Rafales estimated at $12 billion (9.1 billion euros).

]]> Thu, 09 FEB 2012 09:07:15 AEST Tokyo (AFP) Feb 8, 2012 - The United States is to shift 4,700 Marines from Okinawa to Guam without waiting for progress on controversial plans to relocate a US base on the Japanese island, it was expected to be announced Wednesday.

The redeployment was originally planned to take place in tandem with the shuttering of the base at Futenma, a crowded urban area, and the opening of a new facility in a sparsely populated coastal zone.

But Washington has become increasingly frustrated by Japanese foot-dragging on the issue, which has dominated Okinawan public life for years.

A formal announcement that Washington will go ahead with the redeployment is expected later Wednesday following talks in Washington between senior representatives from each government, two US officials told AFP.

Under a 2006 plan the United States and Japan agreed 8,000 Marines would leave the tropical Japanese archipelago, bound for the American territory of Guam.

At the same time Marine Corps Air Station Futenma would close and a new facility would be built at Henoko on the east coast.

But many Okinawans, angry at decades of shouldering the burden of more than half of the around 50,000 US troops stationed in Japan, are opposed to the plan and say other parts of the country should play host.

The expected announcement could cause problems for Tokyo, which was touting the reduction in troop numbers as a carrot to get Okinawans to accept the unpopular base move.

"What we're looking to do is de-link the movement of forces to Guam and the Futenma replacement facility," one US defence official said.

By scaling back the US military footprint, "it will reduce some of the stress" on Okinawa, said the official, who spoke on condition of anonymity.

US defence officials and military officers said they could not confirm earlier Japanese reports that a further 3,300 Marines would be redeployed to other countries in Asia.

On Wednesday the Yomiuri and the Asahi newspapers said Tokyo was resisting a US plan to send some Marines to an existing facility in Iwakuni in western Japan, while Washington was also eyeing redeployments to Australia, Hawaii, the Philippines or South Korea.

The Yomiuri said the new plan would also include the return of some other US military sites in southern Okinawa, moves that could help assuage anger among voters on the island chain.

Japanese Prime Minister Yoshihiko Noda told parliament on Wednesday he had no intention of abandoning the plan to close Futenma.

"We definitely have to avoid fixing the site of the Futenma air base at the current place. There's no change in our plans to relocate the base to Henoko," he said.

burs-kh/hg/jw

]]> Thu, 09 FEB 2012 09:07:15 AEST New York (UPI) Feb 7, 2012 - Global aerospace and defense business reached record levels in 2011, up from $22 billion in 2010 to $44 billion, despite fears it could turn out to be a bad year overall for the industry, latest data indicated.

Most fears were based on reports of a decline in defense acquisitions, which did happen but was more than offset by an aerospace boom that seems set to continue this year.

U.S.-affiliated transactions dominated activity and cross-border deals showed a significant increase.

Government cutbacks and the allied withdrawal from Iraq and reduction in military commitments in Afghanistan gave rise to warnings last year that the defense industry was headed for a downturn but the high level of aerospace transactions has weighed in to produce upbeat results.

Findings of the industry's surprise performance came in Mission Control, a quarterly PwC US analysis of mergers and acquisition activities in the aerospace and defense industries worldwide. The report used data from the fourth quarter figures and overall figures for the year.

"We saw a wide-ranging mix of deals in 2011 as global aerospace and defense M&A activity reached record levels," said Scott Thompson, U.S. aerospace and defense leader at PwC.

"Larger deals became more common, driven by sales of slower-growth defense businesses and private equity exits, while smaller deals drove the bulk of deal volume as major players with ample liquidity focused on acquiring growth," Thompson said.

The aggregate deal value during the year reached $43.7 billion supported by 341 deals, compared to total deal value of $21.9 billion and 332 deals in 2010.

The 2011 record surpassed the level of transactions reached in 2007 of $42 billion.

It was a year marked by mega deals in excess of $1 billion each, one of those for a total value of $16 billion.

A big increase in aerospace deals contrasted with a decrease in defense contracts.

Both aerospace and defense manufacturers are looking to markets in Asia and Latin America for a continued growth in orders. Asian and Latin American countries, including many in peacetime conditions, are busy modernizing their forces and fleets, activities that are set continue this year.

Government cutbacks in Western countries will continue to take their toll, however.

"The uncertain outlook is causing defense contractors to further globalize in the face of growing competition for a shrinking pool of business. These trends will play a major role in deal activity as the year unfolds," Thompson said.

However, competition in the industry is growing too, as several countries continue multibillion-dollar investments to modernize their own aviation and defense industries and enter the markets on competitive terms.

Many nations, including China, India and Brazil, are trying to take advantage of the changing conditions and develop their own industries to compete with established rivals.

]]> Thu, 09 FEB 2012 09:07:15 AEST Paris (AFP) Nov 9, 2010 - French defence and aerospace group Thales said Tuesday its sales slipped 1.0 percent last year to 13 billion euros, but that it expected to boost its operating margin to six percent this year.

The company, which announces annual results on March 6, said orders rose one 1.0 percent to 13.2 billion euros in 2011.

It said it expected to continue to improve its operating margin from 5.0 percent in 2011 to 6.0 percent in 2012.

]]> Thu, 09 FEB 2012 09:07:15 AEST Munich, Germany (AFP) Feb 4, 2012 - The United States sought Saturday to reassure old European allies of its continued support despite a strategic shift to Asia, amid warnings the EU could be sidelined by its economic crisis.

But as leaders, ministers and experts discussed the transatlantic alliance and Asia's rise at the annual Munich Security Conference, frantic diplomacy on the sidelines failed to prevent a veto of a UN resolution on Syria.

A top US delegation, led by Secretary of State Hillary Clinton and Defence Secretary Leon Panetta, delivered a carefully calibrated message of support to Europe, as it slashes troop numbers on the continent and looks east.

Reducing its military presence in Europe while tailoring it to future threats, Washington sees the looming strategic challenge in the Asia-Pacific as a newly powerful and assertive China rattles US allies in the region.

But Clinton stressed: "I've heard all the talk about where Europe fits into America's global outlook. I've heard some of the doubts expressed. But the reality couldn't be clearer: Europe is America's partner of first resort."

For his part, Panetta said: "Europe remains our security partner of choice for military operations and diplomacy around the world -- as we saw in Libya last year, and as we see in Afghanistan every day.

"We are therefore deeply committed to strengthening transatlantic security partnerships and institutions, including NATO," he said.

While the US military plans to withdraw two of its four army brigades stationed in Europe in 2014, Panetta announced that a US-based brigade will contribute to the NATO Response Force, a 13,000-strong unit created in 2002.

The US military will also rotate a battalion-sized task force to Germany to take part in exercises and training.

With so many top officials gathered in this southern German city, ministers engaged in frenzied diplomatic activity in an ultimately unsuccessful bid to achieve consensus for a UN resolution dealing with violence in Syria.

Both Clinton and German Foreign Minister Guido Westerwelle held bilateral meetings with Russian Foreign Minister Sergei Lavrov in an attempt to change Moscow's mind on the text under negotiation at the UN.

But Clinton acknowledged late Saturday, "I thought there might be some ways to bridge even at the last moment a few of the concerns that the Russians had.... That has not been possible."

In a swipe at Russia and China, which vetoed the text in New York, Clinton said: "To block this resolution is to bear responsibility for the horrors that are occurring on the ground in Syria."

She warned that the twin veto risked plunging Syria into "civil war."

With the eurozone crisis never far from the headlines, the conference also focused on the diplomatic implications of the turmoil -- as organiser Wolfgang Ischinger termed it, "banks not tanks."

And Europe received a stark warning from top figures such as the head of the World Bank and the Australian foreign minister that increasing insularity due to the crisis meant the EU risked missing the boat as China gains in prominence.

Australia's Kevin Rudd said as Europe becomes more "introspective" and "preoccupied with its internal problems", it is running "the risk of talking itself into an early economic and therefore globally political grave."

And Robert Zoellick from the World Bank stressed: "Frankly, most of us think the big danger is not only economic but the big insularity that has guided European policy for the last 10 years will just be exacerbated."

The prime minister of Italy, at the epicentre of the debt crisis that has threatened to tip the 17-nation bloc into recession, admitted that the turmoil has opened cracks in European unity.

The euro crisis has pitted north against south, big countries against small and has driven Britain even further to the periphery, Monti said.

"We certainly do not need in Europe to have phantoms of the past to be coming up again," said the premier.

]]> Thu, 09 FEB 2012 09:07:15 AEST Munich, Germany (AFP) Feb 5, 2012 - With little cash to spare for their armed forces, Europeans must deepen military cooperation after incessant US pressure urging old allies to start pulling their own weight.

A parade of world defence leaders and experts meeting at the Munich Security Conference issued stark warnings about Europe's place in the global arena if it fails to maintain its military might.

With the debt crisis forcing governments to cut spending, Europeans were told they have little choice but to look to each other to ensure they have the aircraft, ships and weapons they need to stay relevant.

"I m not concerned. I'm not pessimistic, on the contrary I see opportunities in this financial crisis to strengthen mechanisms that band allies together," said NATO Secretary General Anders Fogh Rasmussen.

Europeans are slowly moving towards more cooperation.

Rasmussen launched the "Smart Defence" initiative a year ago in Munich, aiming to find ways for the 28-nation alliance to deepen cooperation to maintain military capabilities.

The European Union is promoting a similar "pooling and sharing" initiative to find ways to share resources or buy expensive equipment together.

"Nations realise that going alone, especially for large projects, is not possible," said French General Stephane Abrial, NATO's Supreme Allied Commander for Transformation tasked with finding new ways to cooperate.

But Abrial admitted in a panel discussion on Smart Defence that the alliance will only present "modest" programmes at a NATO summit in Chicago in May.

"I'm a little bit sceptical," said Thomas Enders, chief executive of European aerospace giant Airbus. "20 years ago these ideas were on the table. So why would this time be different."

With the United States cutting its own massive defence budget, withdrawing troops from Europe and turning its strategic gaze towards Asia, Europe can no longer rely on its big-spending ally to fill the gap.

Only a handful of NATO nations respect the alliance goal of spending at least 2.0 percent of GDP on defence, while the US military budget represents 75 percent of the alliance's spending.

"This concept of Smart Defence is welcome news for most American politicians," said Republican US Senator Lindsey Graham.

"It shows that the NATO nations are really seriously thinking about maintaining a robust defence. But if it translates to a nice sounding phrase to justify less spending, I think that's not very smart."

US Defence Secretary Leon Panetta, who came to Munich with US Secretary of State Hillary Clinton to reassure Europeans that Washington was committed to Europe, urged allies to "cast a similar vote of confidence" by continuing to invest in defence.

British Defence Secretary Philip Hammond noted that the two US secretaries sent "a clear message to us in Europe that we are going to have to do more."

But a deep attachment to national sovereignty and wrangling over financing programmes have slowed progress.

NATO allies agreed on Friday to acquire five drones as part of a surveillance programme, but it took two decades after they sorted out disagreements about how to fund the project.

"We have to step cautiously because there are anxieties and concerns about sovereignty, about freedom of operation, which need to be addressed, and they can only be addressed through building trust," Hammond said.

He called for small, "less controversial" steps like joint training before moving on to pooling and sharing resources.

Britain, which is deeply attached to its traditional alliance with the United States within NATO, has also resisted efforts championed by France, Germany and Poland to deepen military integration through the European Union.

"The EU in the past was so willing to declare its ambitions in security policy," said Polish President Bronislaw Komorowski. "I believe that today the EU must move on from declarations, from words to deeds."

]]> Thu, 09 FEB 2012 09:07:15 AEST Helsinki (AFP) Feb 6, 2012 - Finland's president-elect Sauli Niinistoe must come clean on key foreign policy issues such as NATO membership and relations with Russia, political observers said Monday, a day after his crushing election triumph.

Ninistoe, a conservative pro-European career politician and former finance minister, scored a resounding victory over Green League candidate Pekka Haavisto on Sunday, winning 62.6 percent of the vote to Haavisto's 37.4 percent.

Despite his convincing win after two rounds of campaigning and election voting, the president-elect has yet to say where he stands on major foreign policy issues, analysts noted.

The president's powers have gradually been cut back in recent years, with EU policymaking recently stripped from his brief and handed to the government. But other foreign policy is still decided jointly by the president and government.

"He did not give any political speech or give any indication of his future plans" after Sunday's victory, Janne Virkkunen, a former editor of Finland's daily of reference Helsingin Sanomat told reporters Monday, noting that NATO membership and ties with Moscow were not fully explored in pre-election debates.

Finland has a complex relationship with the North Atlantic alliance.

The small Nordic country is the only non-NATO European state bordering Russia, and its non-alignment with the military bloc is seen as an important tool for maintaining good relations with its hefty eastern neighbour, observers say.

It is however part of NATO's Partnership for Peace programme which engages non-NATO countries in bilateral relations.

Finland favours European-based military cooperation and is active in two European Union Rapid Deployment Forces.

Some observers suggested few changes lay ahead.

With recent surveys showing the country evenly split on the issue of NATO membership, neither Prime Minister Jyrki Katainen nor president-elect Niinistoe -- both from the conservative National Coalition Party -- are likely to want to seek membership anytime soon, according to Abo University research director Kimmo Groenlund.

All the same, "with a high level of support for membership among National Coalition supporters, Niinistoe may begin speaking more warmly about NATO" during his term as president, he added.

Before introducing the NATO question, though, Niinistoe will have to prepare the nation, Virkkunen countered, adding that "he did say he wants to have a referendum before Finland can join NATO."

Prime Minister Jyrki Katainen has meanwhile declared that his coalition government will not discuss the question of NATO membership during the current cabinet term, which ends in 2015, Virkkunen said.

Russia and Finland currently enjoy good relations, analysts said, noting however that Niinistoe failed to provide -- or avoided -- any clear position on ties with the Kremlin, particularly in light of ongoing anti-government rallies and charges of election fraud in Russia.

Niinistoe takes office in March, succeeding popular outgoing President Tarja Halonen who is stepping down after serving the maximum two six-year terms.

Halonen, a Social Democrat, has opposed NATO membership, and expressed concern about the Russian response to Baltic countries joining the military alliance.

]]> Thu, 09 FEB 2012 09:07:15 AEST Washington (AFP) Feb 3, 2012 - The US Air Force plans to spend $2.8 billion to keep old combat aircraft in the air because of major delays with the new F-35 fighter jet program, top officials said Friday.

With the production schedule of the F-35 jet repeatedly postponed due to technical problems, the Pentagon will upgrade 350 aging F-16 fighters to fill the gap in the fleet, Air Force leaders told reporters.

"The issue with respect to F-35 is that obviously the planes are not delivering as quickly as originally anticipated," said General Norton Schwartz, the Air Force chief of staff.

As a result, the Air Force needed "to posture the legacy force to make sure that we retain the capabilities we need until the F-35 delivers in numbers," he said.

The F-35 Joint Strike Fighter, manufactured by Lockheed Martin, is touted as the backbone of America's future air fleet but an ambitious production timeline has unraveled due to technical headaches that emerged in initial flight tests.

Officials discussed extending the service life of the F-16s as they unveiled details of the Air Force's proposed budget for fiscal year 2013.

Despite production delays for the F-35, Air Force Secretary Michael Donley insisted the government remained fully committed to the program and to purchasing a total of 2,443 of the aircraft as planned.

"This is a must-do for our armed forces. It's the future of the fighter force, not only for the Air Force, Navy and Marine Corps, but also about 12 other international partners as well," he said.

At an estimated $385 billion, the F-35 is the Pentagon's most expensive weapons program. The military had hoped to have 423 of the F-35 fighters built between 2013 and 2017 but has had to slash the number down to 244.

US Air Force to cut fleet in budget squeeze: officials
Washington (AFP) Feb 3, 2012 - The US Air Force is proposing to cut 286 aircraft from its fleet, officials said Friday, as the Pentagon seeks to rein in defense spending after a decade of massive budgets.

Air Force chiefs unveiled the outlines of a proposed budget for 2013 that included retiring some older aircraft and eliminating 9,900 positions.

With the Pentagon looking to scale back projected spending by $487 billion over the next decade, the Air Force cutbacks represented "tough choices," said Air Force Secretary Michael Donley.

"This is hard but manageable," he said, adding that deeper cuts could not be sustained without damaging the country's military might and unrivaled air power.

The proposals for fiscal year 2013 include retiring 123 fighters, 133 transport aircraft and 30 surveillance planes, he said.

The bulk of the fighters to be cut are 102 A-10 warplanes, designed as "tank killers" to back up ground forces. The aircraft, which dates back to the 1970s, saw action in Libya, Iraq and previous conflicts.

But Donley said there was no longer money for "niche fleets" and that the Air Force had opted to devote limited funds to more versatile aircraft.

Despite the cutbacks, there would still be 246 A-10s remaining in service along with other aircraft capable of providing close air support for troops on the ground, said General Norton Schwartz, Air Force chief of staff.

"The bottom line is, as remarkable an airplane as the A-10 is, it isn't the only machine that does close air support," he said.

Officials also said the A-10 "Warthog" -- which came into service in the 1970s -- appeared out of place under a new US strategy more focused on the Asia-Pacific region, where the American military does not anticipate having to take out tanks in a massive ground war.

"The Air Force is retiring planes that don't fit into the Asia-Pacific strategy," said Loren Thompson of the Lexington Institute, which has ties to defense contractors.

The revised US strategy unveiled last month calls for a "leaner" force more focused on Asia, amid concern over China's growing economic and military power.

Despite fiscal pressures, the Air Force had maintained ample funding for key priorities, Donley said, including support for bomber forces, the new F-35 fighter, unmanned aircraft, satellites and cyber programs.

President Barack Obama has raised the possibility of streamlining the nuclear force with "smaller numbers" but the White House has yet to make a final decision, he said.

The proposed budget envisages cutting 9,900 personnel on active duty as well as those in the Air National Guard and reserves, officials said.

The Air Force currently has more than 500,000 service members, including airmen in the guard and reserves. By next year, it will be the smallest force since the US Air Force was created in 1947.

]]> Thu, 09 FEB 2012 09:07:15 AEST Bangalore, India (UPI) Feb 3, 2012 - French aircraft manufacturer Dassault has landed India's biggest military contract with a $10 billion order for 126 Rafale jet fighters.

In a brief announcement on its Web site Dassault said it is "honored and grateful to the Indian government and the people of India to be given the opportunity to extend their long-lasting cooperation."

Dassault Aviation and its partners "reiterate their commitment to meet the operational requirements of the Indian air force and underline their pride in contributing to India's defense for over half a century."

Dassault was the low bidder, edging its main rival EADS with its Eurofighter Typhoon, a report in The Times of India said.

India's decision to opt for Dassault is a further blow to EADS. In late December EADS lost out to Lockheed Martin's fifth-generation fighter F-35 Lightning II in a major Japanese military contract.

Japan chose the F-35 also over Boeing F/A-18 Super Hornet in a deal estimated at around $7 billion for 42 planes.

The Times of India also reported unnamed source saying further negotiations on price will be held between Dassault and the government in the next two weeks.

The announcement ends a five-year search by the Indian government to find a supplier for its next-generation fighters.

The tender, which was issued in August 2007, also was contested by Boeing with its F/A-18E/F Super Hornet, Lockheed Martin's F-16, the Russian-made MiG-35 and the Gripen from Swedish firm Saab.

However, the U.S., Russian and Swedish bids eventually were rejected after technical evaluation and field trials, The Times of India reported last year.

To the request for proposal stated that the bid winner was to supply 18 of the 126 aircraft to the air force within 36 months from the manufacturer's own facilities. Under transfer of technology agreements, the remaining aircraft will be manufactured in India at the Bangalore factories of Hindustan Aeronautics Limited.

HAL is a Navratna company -- a government business -- and has 19 production and overhaul divisions and 10 research and development centers in India, the company's Web site said. It has 33,000 employees of which around half have "more than a decade of aircraft industry experience."

HAL also has also diversified into the manufacture as well as the repair and overhaul of industrial and marine gas turbine engines.

Among HAL's major upgrades have been 63 of the Indian air force's 69 MiG-29 fighter aircraft as part of $900 million deal with Russia's MiG Corp. announced last February. The first six upgrades -- separate from the upgrades to be done by HAL -- were done by MiG in Russia.

In July 2010, BAE Systems won a $700 million contract to supply India with 57 Hawk Advanced Jet Trainers to be built under license by HAL. The British single-engine, tandem-seat Hawk trainer is manufactured in Bangalore.

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