Analysis: Saudi Arabia - A close customer (part 2 - air)
As we have already seen in Part 1 – Land, the close defence relationship between Saudi Arabia's ruling House of Saud and Western governments is built on a series of huge contracts for new and upgraded tanks and armoured vehicles that makes the Saudi land forces the most modern in the region.
But the money spent on ground equipment is chicken feed compared to that spent on the air force. The helicopters, fighters and bombers and the transport aircraft bought from the US and Europe far exceed the land and maritime domains and is where the relationship is closest with industry.
On 13 December, Saudi Arabia recieved its first four of 152 upgraded Boeing F-15SA (Saudi Advanced) fighter jets, which illustrates this neatly.
But, the most high profile in recent years has been the procurement of fast jets, particularly when the Royal Saudi Air Force (RSAF) selected the Eurofighter Typhoon multi-role fighter to replace Tornado and supplement its existing fleet of US-built F-15C/D fighters.
These Typhoons were taken from a batch that was due to be delivered by BAE Systems to the UK Royal Air Force so it shows the priority given to the Saudis. The initial was deal signed in 2007 for 72 aircraft at a cost of $8.86 billion to be delivered in three batches (three sets of 24). As of this year the second batch was delivered with the third underway. BAE is in negotiation for a further 48 aircraft but concerns over human rights have strained relations and it is unlikely to go through.
However, in 2012, BAE Systems secured a $2.5 billion contract for training aircraft including 22 Hawk, 55 Pilatus PC-21 aircraft, simulators and support, with the Hawk deliveries due to start this year after the PC-21s are completed. The company is also providing Cirrus SR22 aircraft as part of the deal.
Elsewhere upgrades to existing fighter aircraft remain the most lucrative for industry. The RSAF wants to keep some 84 Tornados in service until 2025 and includes the aircraft and supporting weapon and electronic systems. Stage three of the upgrade was signed in 2014 and is worth $2.5 billion to BAE Systems. Raytheon is providing its Paveway IV bombs, MBDA its Storm Shadow munition and Thales Damocles pods.
The biggest deal however was announced in 2010 with a $60 billion aircraft deal between the US and Saudi Arabia. The largest section of this deal was signed in 2011 in a contract worth $29.4 billion for 84 new Boeing F-15SA Strike Eagle aircraft and also included upgrades to the existing fleet. The arrival of the first four aircraft on 13 December included two new build F015SA and two upgraded F-15S. The RSAF already has 59 F-15C, 21 F-15D and 68 F-15S aircraft.
The older F-15s were already being upgraded with new datalinks (under an earlier contract for $34.8 million to Data Link Solutions, which is a joint venture between BAE Systems and Rockwell Collins, in 2007) and engines (in contracts with GE Aviation worth a total of $750 million in 2007-08), but the new deal has led to a spate of new contracts.
In 2012 Goodrich - now UTC Aerospace - received $183 million for pods and logistics support, BAE Systems $367 million for electronic warfare systems, Boeing $18.4 million for the integration of eight pods. In 2013 the contracts included $253.4 million for Lockheed Martin for undisclosed work with a second contract worth $21.4 million for targeting pods that is part of a longer term pod contract worth about $220 million. Raytheon got three contracts totalling $33.4 million for electronic and software systems but overall Boeing has secured $3.5 billion for conversion kits for the modernisation of the 68 F-15S aircraft to SA standard.
Saudi Arabia is also in a process of modernising it helicopter fleets and has a healthy inventory of western attack, multirole, utility and light helicopters.
In a 2010 deal, Saudi Arabia is acquiring 60 Apache AH-64 Block III helicopters and associated weapons in a deal worth $9.7 billion. There are 10 for the Saudi Royal Guard, 24 for the Royal Saudi Land Forces and 36 for the Saudi Arabian National Guard (SANG) – the royal family's second army used for internal security.
Deals announced by the US DoD in 2013 shows that one Apache contract was valued at $333 million so far with others valued in the tens of millions.
Boeing has upgraded 12 Apache AH-64A attack helicopters to the 'D' standard for about $400 million, this likely to be for the SANG and includes a sights contract with Lockheed Martin worth $66.6 million awarded in 2012. This followed a $15.3 million contract the previous year. The Royal Saudi Land Force has been taking deliveries of the AH-64E 'Guardian' variant from Boeing and Lockheed Martin secured a contract last year to provide target acquisition sights for this variant for $10 million.
Meanwhile Boeing is providing SANG with 24 AH-6i Little Bird light attack and reconnaissance helicopters under a $234.7 million contract announced in 2014, although there has been a delay and deliveries have yet to take place.
In 2008 22 UH-60L Blackhawks were acquird for $286 million but now a total of 24 have been purchased. In 2010 as part of the $60 billion aircraft deal the acquisition of 72 UH-60M transport helicopters was also included, 24 of which will go to the SANG with 16 delivered so far. The latest contract announced on 30 September was for $91.8 million for Sikorsky to deliver eight helicopters.
Sikorsky has business elsewhere and is upgrading 12 S-70A Blackhawk multirole helicopters to the L variant for an estimated $60-80 million and is delivering 10 MH-60R naval helicopters for the Royal Saudi Naval Force for $145 million. This is part of a deal worth a total of $1.9 billion, which was announced in 2015 and also includes a host of electronic, sensor and weapon systems worth $11.8 million for SAIC, $66 million for Raytheon and Lockheed Martin $117 million.
MD Helicopters has provided 12 MD 530F training aircraft to SANG for $40.7 million that was completed in 2013.
For transport aircraft, the RSAF wants to replace its ageing C-130E transport aircraft. A FMS request for new and upgraded C-130s was announced in 2012 worth $6.7 billion. Contracts will be awarded in increments and Lockheed Martin has so far received $181 million and $662 million in 2013 and 2015 respectively for C-130 work. The first two KC-130 were delivered earlier this year.
Saudi Arabia is also buying eight An-132 and 30 An-178 transport aircraft from Ukraine's Antonov some of which will be built in-country under an agreement with Saudi state-owned company Taqina Aeronautics. Sub contract agreements have been signed this year with Pratt & Whitney for engines and Liebherr Aerospace for air management systems with, Esterline CMC, Hamilton Sundstrand, Honeywell and Broetje-Automation involved. The value of both could total about $90 million.
The air force is upgrading its five E-3A airborne warning and control aircraft under three major contracts. The largest and most recent is the Block 40/45 avionics modernisation programme worth up to $2 billion announced in 2014. This follows a radar and command and control systems upgrade worth up to $400 million, first announced in 2007 and due to finish this year from which Boeing has been awarded a succession of contracts worth a total of at least $260 million with Northrop Grumman as a major sub-systems contractor. Communications terminals were added from 2007-09 by Boeing and Data Link Solutions for $49.2 million.
The RSAF also bought a Saab 2000 Erieye early warning and control aircraft from Saab in 2010 for $667 million that was delivered in 2014.
Other recent aircraft acquisitions include a number of Beechcraft King Air 350i light transport aircraft modified by Raytheon for use for intelligence, surveillance and reconnaissance. They are being fitted with ISR equipment worth up to $257 million. The RSAF also bought three MultiRole Tanker Transport aircraft from Airbus from 2013-2016 for a reported $500 million.
The operation of a modern and well-funded air force makes Saudi Arabia a major regional power. By purchasing the latest aircraft, weapons, sensors and computer systems from Western suppliers the Saudi regime is making some powerful friends and is becoming an invaluable customer. The purchase of expensive naval platforms and upgrading of existing ships only adds to this breadth of western industrial involvement, see part 3 - the maritime domain here.
Until recently Saudi Arabia has avoided military operations but it is becoming more openly proactive rather than just working behind the scenes. By flexing its muscles in Yemen alongside its backing of some rebel groups in Syria it is becoming a more uncomfortable relationship for Western governments and industry to manage.