Procurement: May 20, 2004


One side effect of increasingly expensive warplanes is that they are expected to stay in use longer, and undergo more modifications and upgrades during their lifetime. Currently, American warplanes are expected to be capable of serving for up to 40 years. The B-52 bombers in service have already passed that mark, and still have several more decades of service left in them. 

To the companies that build the aircraft, and all the stuff that goes into them, the larger market is not building new aircraft, but servicing, repairing and upgrading existing aircraft. With so few new aircraft being bought, and existing aircraft being kept in service for so long, this development is pretty obvious. The Honeywell Corporation, long a manufacturer of aircraft components, started a division just for aircraft maintenance and upgrades in 2002. By 2003, the operation was doing $1.3 billion in business a year. A third of the business came from aircraft repairs, and the rest from spare parts sales and installation. Another aspect of this is that the original manufacturers will not be getting as much of the money spent on warplanes as was previously the case. Now, anyone with a new idea for maintaining or upgrading aircraft can produce the component and/or service and get a chunk of the aircraft upgrade budget. 

Israel has been a major player in this area, getting billions of dollars in orders to upgrade older American (like the F-4 Phantom) and Russian (MiG 21) aircraft. Better engines and electronics can greatly improve the reliability and effectiveness of these older warplanes. During World War II, the lethality of a fighter aircraft was in the aircraft itself (the power of its engine and design of wings and other structural elements to enhance maneuverability.) But in the last sixty years, more of the lethality has moved to electronics and missiles. Thus a MiG-21 (designed in the 1950s) with the latest radar and missiles can regularly defeat a warplane designed 30 or 40 years later (but lacking the latest electronics and missiles). 


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