U.S. Budget Deal Provides Relief as Long-Term Uncertainty Lingers

by Shaun McDougall, Military Markets Analyst, Forecast International.

U.S. Capitol Source: Forecast International

U.S. Capitol
Source: Forecast International

The White House and congressional leaders announced a budget deal to increase spending limits for the Department of Defense in FY16 and FY17, but the Pentagon must still trim some fat. While the Bipartisan Budget Act of 2015 provides some semblance of stability in the near term, the legislation fails to address long-term concerns and is far from an ideal solution. Similar to the Murray-Ryan deal that provided limited relief from spending caps in FY14 and FY15, the short-term nature of the agreement places yet another round of contentious debate on the horizon. Even though the legislation establishes revised spending caps for two years, it does not guarantee a smooth budget process in FY17. Even though the Murray-Ryan deal increased available funding for FY15, the administration fought a losing battle over a $26 billion supplemental fund for the military, and the Pentagon was still forced to endure a continuing resolution for nearly three months before a final FY15 appropriations bill was signed in December. Continue reading

Northrop Grumman Outlook Strengthens with LRS-B Win

by Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.

Long Range Strike-Bomber Concept. Source: Northrop Grumman

Long Range Strike-Bomber Concept. Source: Northrop Grumman

Northrop Grumman secured its position as a military aircraft producer when the U.S. Air Force selected it to produce the next-generation Long Range Strike-Bomber.

At a time when sales have been slowly sliding, the program win breathes new life into the country’s fifth largest defense contractor. Prior to this, the company was ably managing the slowdown in defense spending. The firm embarked on a strategy that entailed increasing program performance, aggressively pursuing new business, reducing cost structures, and aligning its portfolio to match customer spending priorities. Continue reading

Unease in President Emomali Rahmon’s Tajikistan

by Derek Bisaccio, International Military Markets Analyst, Forecast International.

Tajik President Rahmon with Russian President Putin in Sochi, October 6, 2015

Tajik President Rahmon with Russian President Putin in Sochi, October 6, 2015

September was a tough month for Tajikistan, particularly for Tajik President Emomali Rahmon. Two terrorist attacks in one day by a former defense official at the start of the month and the fall of Kunduz in neighboring Afghanistan at the end of the month set the tone for a series of discussions with other regional leaders about security in Central Asia and especially in Tajikistan. Continue reading

Business Jet Prospects Brighten as U.S. Customers Return to the Market

By Ray Jaworowski, Senior Aerospace Analyst, Forecast International.

Cessna Mustang

Cessna Mustang

Forecast International’s latest analysis of the worldwide business jet market indicates that a total of 9,237 business jets will be produced in the 10-year period from 2015 through 2024.  We estimate the value of this production at $248 billion in constant 2015 U.S. dollars. Continue reading

Chinese/Russian SmallSat Joint Venture Could Play Role in $40 Billion Silk Road Project

By Bill Ostrove, Space Systems Analyst, Forecast International.

Dauria's Auriga

Dauria’s Auriga

Cybernaut, a Chinese investment fund, has signed an agreement with Russian satellite builder Dauria Aerospace to provide $70 million in financing. Under the agreement, the two companies will form a joint venture called UrbanObserver, based in Hong Kong, which will develop 10 remote sensing satellites to conduct daily imaging of the 100 largest cities in the world. The agreement was signed at the second Chinese-Russian Expo, in Harbin, China.[i]

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Old Cat, Old Nukes, New Tricks

By Matthew Beres, Airborne Retrofit & Modernization Analyst, Forecast International.

Jaguar Gr.5

Jaguar Gr.5

You’ve heard it before, a bit of a broken record – often highlighted along with the Rafale multirole fighter roller-coaster ride. India’s highest risk defense concern is a two-front war with Pakistan and China. (For the skeptics, we’re not talking about whether it will happen, but about if it does.) The Himalayas offer a natural protective border, offering Myanmar and Pakistan as the only legitimate ground attack routes, which in themselves offer little advantage for a severely stretched Chinese logistics support line. A naval attack would also offer little advantage on the home turf of the Indian naval forces. Continue reading

Canada’s New Leader Vows to Drop F-35 as Priorities Shift to Homeland Defense

by Shaun McDougall, Military Markets Analyst, Forecast International.

A Pair of U.S. Air Force F-35A Joint Strike Fighters. Source: U.S. Air Force

A Pair of U.S. Air Force F-35A Joint Strike Fighters. Source: U.S. Air Force

Canada’s Liberal Party has ended nearly a decade of rule under Prime Minister Stephen Harper and his Conservatives, a change that does not bode well for Lockheed Martin’s F-35 Joint Strike Fighter. The Liberals, led by Justin Trudeau, won a majority government with 184 seats in Parliament, meaning they will not have to form a coalition with the leftist New Democratic Party, which won 44 seats. The Conservatives held on to 99 seats, while the Bloc Quebecois took 10 seats and the Green Party just one. In the previous election in 2011, when the Conservatives formed a majority, the NDP actually beat out the Liberals to become the official opposition party for the first time ever. The latest election represents a shift to the center, carrying with it a number of significant defense policy changes.

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Top-Five Military Satellite Manufacturers to Hold Strong Long-Term Market Positions

By Bill Ostrove, Space Systems Analyst, Forecast International.

Atlas V satellite launch

Atlas V satellite launch

Over the next 10 years, the top-five military satellite manufacturers will be Lockheed Martin, Mitsubishi Electric, Boeing, ISS Reshetnev, and Airbus. The companies are ranked based on the forecast value of production of their satellite products between 2015 and 2024. Although other companies act as subcontractors, this list is determined by estimating the revenues of the prime contractors in the military satellite industry. Continue reading

Ireland’s Defense Earmark for 2016 Falls Flat

by Dan Darling, International Military Markets Analyst, Forecast International.

Irish Ireland FlagThe Irish Department of Defense announced its funding allocation for 2016 on October 13. The total earmark for FY16 will amount to EUR904 million ($1.032 billion). This represents an infinitesimal nominal year-on-year increase of EUR6 million, or about 0.7 percent, above the 2015 defense budget of EUR898 million. Continue reading

Baby Steps: Indian Defense Ministry Moving Forward on 155mm/52-cal Self-Propelled Howitzer Requirement

by Daniel Darling, Military Markets Analyst, Forecast International.

K-9 Vajra howitzer

K-9 Vajra howitzer

The Indian Defense Ministry has awarded the partnership of local engineering prime Larsen & Toubro (L&T) and South Korea’s Samsung Techwin with a contract worth $750 million (INR48.71 billion) for 100 K-9 Vajra howitzers. The K-9 consists of a 155mm, 52-caliber howitzer mounted on a tracked vehicle, providing it with the necessary mobility to maintain pace with the Indian Army Mechanized Strike Corps’ T-90S tanks. Continue reading