U.S. To Buy Decommissioned British Harrier Jets

WASHINGTON and LONDON - Britain has agreed to sell all of its 74 decommissioned Harrier jump jets, along with engines and spare parts, to the U.S. Navy and Marine Corps - a move expected to help the Marines operate Harriers into the mid-2020s and provide extra planes to replace aging two-seat F-18D Hornet strike fighters.

A Harrier GR9 takes off for the last time in November 2010 from the now-decommissioned aircraft carrier HMS Ark Royal. The U.S. Navy and Marine Corps are buying 74 decommissioned British Harrier jump jets. (U.K. Ministry of Defence)

Rear Adm. Mark Heinrich, chief of the U.S. Navy's Supply Corps, confirmed the two-part deal Nov. 10 during a conference in New York sponsored by Bank of America Merrill Lynch in association with Defense News.

Heinrich negotiated the $50 million purchase of all Harrier spare parts, while Rear Adm. Donald Gaddis, the U.S. Navy's program executive officer for tactical aircraft, is overseeing discussions to buy the Harrier aircraft and their Rolls-Royce engines, Heinrich said.
A spokesman for the Ministry of Defence in London confirmed the Disposal Services Agency was in talks with the U.S. Navy for the sale of the Harriers. The deal had yet to be concluded, he said Nov. 11.
Britain retired its joint force of Royal Air Force and Royal Navy Harrier aircraft late last year in one of the most controversial moves of the defense reductions, which also cut the aircraft carriers that operated the jets, other warships, maritime patrol planes and personnel.
Most of the retired Harriers are stored at the Royal Air Force base at Cottesmore, England.
They have been undergoing minimum fleet maintenance, including anti-deterioration measures, in order to keep them airworthy, Heinrich said.
A spokesman for the U.S. Navy's Naval Air Systems Command declined Nov. 11 to comment on the deal, deferring to the British military.
An MoD source said Nov. 11 that he thought both deals could be signed in the next week or two. The MoD source confirmed that the entire fleet of 74 Harrier aircraft was involved in the sale.
Heinrich noted that payment details were the only outstanding issue on the parts deal discussions, and he said the purchase will give the U.S. Marines a relatively economical way to get their hands on key components to keep the Harrier fleet running.

Similar Aircraft

While it is unusual for the U.S. to buy used foreign military aircraft for operation, integration of the British planes into Marine Corps squadrons shouldn't be a major problem, one expert said.
"I don't think it will be costly to rip out the Brit systems" and replace them with Marine gear, said Lon Nordeen, author of several books on the Harrier.
Nordeen noted that the British GR 9 and 9As are similar in configuration to the Marines' AV-8B night attack version, which make up about a third of U.S. Harriers. The British planes also are night planes dedicated to air-ground attack, he said, and while both types carry Forward Looking Infrared (FLIR) sensors, neither is fitted with a multimode radar such as the APG-65 carried by U.S. AV-8B+ models.
The absence of the big radar, Nordeen said, makes the GR 9A and AV-8Bs "a better-performing plane. Weighing less, it's more of a hot rod."
British GR 9s, although upgraded with improved avionics and weapons, are powered by the Rolls-Royce Mark 105 Pegasus engine. GR 9As have the more powerful Mark 107, similar to the Rolls-Royce F402-RR-408s that power Marine AV-8Bs.
British and U.S. Harrier II aircraft had a high degree of commonality from their origin. The planes were developed and built in a joint arrangement between British Aerospace - now BAE Systems - and McDonnell Douglas, now a division of Boeing. While each company built its own wings, all forward sections of the British and American Harrier IIs were built by McDonnell in St. Louis, Mo., while British Aerospace built the fuselage sections aft of the cockpit.
"All the planes have to fit together," Nordeen said.
The Harrier IIs, built between 1980 and 1995, "are still quite serviceable," he said. "The aircraft are not that far apart. We're taking advantage of all the money the Brits have spent on them. It's like we're buying a car with maybe 15,000 miles on it."
Operationally, Nordeen said, "these are very good platforms. They need upgrades, but on bombing missions they have the ability to incorporate the Litening II targeting pod [used by U.S. aircraft]. They're good platforms. And we've already got trained pilots."
Marine Corps Harriers are to be phased out by 2025, when replacement by new F-35B Joint Strike Fighters should be complete.
Nordeen, however, said he expects the British Harriers to be used initially to replace two-seat Marine F-18D Hornet fighters now operated in the night attack role.
"The F-18Ds are more worn out than the Harriers," Nordeen said. "Most of the conversions [of ex-British aircraft] early on will be to replace 18Ds and not Harriers." He noted the first Marine F-35B squadron already is slated to replace an F-18D unit.
Nordeen applauded the move.
"I would see this as a good bargain to extend the operational utility of the Harrier II fleet, no matter what," he said.

Taiwan's Defense Show in Decline; F-16s in Limbo

TAIPEI - The biennial Taipei Aerospace & Defense Technology Exhibition (TADTE), which ran Aug. 11-14, was forced to share floor space with a comic book convention at the World Trade Center here. If that was not humiliating enough, several mainland Chinese businessmen were seen perusing booths. Who and what they were about remain a mystery.

A UCAV on display at the recent Taipei Aerospace & Defense Technology Exhibition. (Wendell Minnick / Staff)

Those familiar with the vibrancy of the Singapore Air Show might be surprised to learn that Taiwan spends about $2 billion more than Singapore on defense annually, yet there was no evidence of that at TADTE this year.

The show has seen steady declines over the past decade. Only six U.S. defense companies exhibited this year: ITT, Lockheed Martin, Northrop Grumman, Raytheon, Pratt & Whitney and Sikorsky Aircraft. Missing were BAE Systems, Bell Helicopter, Boeing, General Dynamics, L-3 Communications, Rockwell Collins, Thales and U.S. Ordnance, all of which traditionally have had booths.
Part of the lack of interest could be attributed to the fact that Taiwan's shopping list for new arms has been filled for the near term and there are few, if any, items left to procure. The military is struggling to pay for $16.5 billion in new U.S. arms released since 2007, including Patriot PAC-3 ballistic missile defense systems, P-3C Orion maritime patrol aircraft, AH-64D Apache attack helicopters and UH-60M Black Hawk utility helicopters.
Added to procurement costs are expensive reform programs. The Ministry of National Defense (MND) is implementing a streamlining and modernization program that will reduce troop strength from 275,000 to 215,000 within the next five to 10 years.
Despite the MND's financial struggles, a U.S. Department of Defense delegation was in Taiwan during TADTE to finalize price and availability options for a $4.2 billion upgrade package for 146 F-16A/B fighter jets.
Sources at TADTE said the midlife upgrade package has been renamed a "retrofit" to reduce complaints from China. To further placate China, the F-16A/B retrofit will be released incrementally rather than as a total package under the U.S. Foreign Military Sales program.
The only serious competition at TADTE was between Northrop Grumman and Raytheon to supply the active electronically scanned array (AESA) radar for the F-16A/B retrofit requirement. Northrop's Scalable Agile Beam Radar and the Raytheon Advanced Combat Radar are vying to replace the current APG-66(V)3 mechanical radar.
If the U.S. government does not release an AESA radar for Taiwan, TADTE sources indicate that the Northrop APG-68(V)9 mechanical radar would be offered as a substitute.
Taiwan is awaiting a final decision by the U.S. on a deal for 66 F-16C/D fighters for $8 billion, and a 2001 offer for eight diesel submarines estimated at more than $10 billion.
TADTE participants said the U.S. plans to release the F-16A/B retrofit with the AESA radar, but not new F-16C/D fighters.
A senior Taiwan MND official said he was "disappointed" by U.S. plans to deny Taiwan the new fighters.
But senior MND and U.S. government officials are denying the report. MND officials insist the U.S. Defense Department delegation did not inform Taiwan of a final decision on the F-16C/Ds, and hope remains for a positive release.
Since 2006, the U.S. has repeatedly denied Taiwan's request for F-16C/D fighters to placate China. In July, the U.S. State Department indicated a final decision on the F-16 issue would be made before Oct. 1.
News of the DoD delegation's visit comes at an awkward time for the administration of President Barack Obama. U.S. Vice President Joseph Biden arrived in Beijing on Aug. 17 to discuss economic and political issues. China has insisted the U.S. end all arms sales to Taiwan, and has threatened to invade the island should it continue to refuse unification.

MND Pavilion

During TADTE, the MND displayed a variety of new weapons and equipment. The most startling were exhibits by the military-run Chungshan Institute of Science and Technology (CSIST).
CSIST displayed the new Hsiung Feng 3 (Brave Wind 3) supersonic anti-ship missile. Though the missile had been displayed at TADTE 2009, this is the first time it was described as an "aircraft carrier killer," with a mural depicting three HF-3 missiles sinking China's new aircraft carrier, the Varyag.
China began sea trials for the Varyag on Aug. 10, the same day the HF-3 display was unveiled to the media. The Taiwan Navy has outfitted two Perry-class frigates, the 1101 Cheng Kung and 1103 Cheng Ho, with the HF-3.
CSIST also displayed models of two new unmanned aerial combat vehicle (UACV) concepts. CSIST officials did not provide any information about the UACV models, but one appeared similar to the General Atomics MQ-9 Reaper, while the other had a diamond-shaped fuselage similar to the Boeing X-45.
A CSIST animated demonstration video showed three X-45-like UACVs flying alongside an F-16 on a mission to attack a Chinese air base. The video also demonstrated how the Reaper-like UACV could be used to attack ground-based radar facilities in China.
The 202nd Arsenal displayed a new 105mm low-recoil turret being developed for the eight-wheeled Cloud Leopard armored vehicle. One Cloud Leopard on display was equipped with a 40mm grenade launcher. Full-rate production has begun, and the military has a requirement for 300 vehicles.

U.S. To Deny Taiwan New F-16 Fighters

Offers AESA Radar in Upgrade for Older Jets
TAIPEI - Bowing to Chinese pressure, the U.S. will deny Taiwan's request for 66 new F-16C/D fighter aircraft, a Taiwan Ministry of National Defense (MND) official said.

An armed U.S.-built F-16 fighter takes off during a drill in April. A Taiwan Ministry of National Defense official says Taipei will not be able to purchase new F-16s and is “so disappointed” in the U.S. decision. (Sam Yeh / Agence France-Presse)

"We are so disappointed in the United States," he said.

A U.S. Department of Defense (DoD) delegation arrived here last week to deliver the news and offer instead a retrofit package for older F-16A/Bs that includes an active electronically scanned array (AESA) radar.
The visit coincided with the biennial Taipei Aerospace and Defense Technology Exhibition (TADTE), held here Aug. 11-14.
"The U.S. Pentagon is here explaining what is in the upgrade package," a U.S. defense industry source said at TADTE. "They are going to split the baby: no C/Ds, but the A/B upgrade is going forward."
Sources said an official announcement of the decision is expected by month's end.
But an official at the American Institute in Taiwan (AIT), the de facto U.S. Embassy, said "no decisions have been made," while DoD officials declined to comment on their delegation's mission.
The proposed upgrade package would make the 146 Taiwanese F-16A/Bs among the most capable variants of the aircraft, perhaps second only to the APG-80 AESA-equipped F-16E/Fs flown by the United Arab Emirates.
Originally requested by Taipei in 2009, the package would cost $4.2 billion, sources at TADTE said.
The new gear would include an AESA radar, likely either Northrop Grumman's Scalable Agile Beam Radar or the Raytheon Advanced Combat Radar, to replace the planes' current APG-66(V)3 radar.
Either one would be an improvement on the Northrop APG-68(V)9 mechanical radar once contemplated for Taiwan's upgrade package. The switch is meant to soften the blow of denying new planes to Taipei, a Lockheed Martin source said.
A decision between the two AESA candidates could foreshadow the U.S. Air Force's own choice as it prepares to upgrade its fleet of F-16s. The upgrade package will also improve the planes' Raytheon ALQ-184(V)7 electronic countermeasures pod by adding the capacity to intercept and save hostile radar transmissions, then use the same frequency to jam them.
However, ITT is offering the ALQ-211 Advanced Integrated Defensive Electronic Warfare Suite pod as an alternative.
ITT is also offering the BRU-57/A Smart Twin Store Carrier, which doubles the number of bombs an F-16 can carry, an ITT source said.
The package would also replace the AIM-9P/M Sidewinder air-to-air missile with the new AIM-9X; fit the planes to carry enhanced GBU-12 Paveway II laser-guided bombs; and add a digital radar warning receiver, helmet-mounted cueing system and center pedestal display.
The package will not include new engines to better handle the additional weight and electrical draw, though there could be an upgrade to bring the existing Pratt & Whitney F100-PW-220 to the PW-220E standard. The upgrade would swap out obsolete parts for newer ones, but wouldn't offer any additional performance.
Lockheed Martin will be working with Taiwan's state-run Aerospace Industrial Development Corp. (AIDC) to integrate the new gear on the jets.
"Changing a fighter's major sensor should not be taken lightly. It is more than electrical capacity. It is the integration of sensors, weapons, displays, etc., that make a fighter aircraft effective," Lockheed spokeswoman Laura Siebert said.

Consequences

Siebert said the failure to release F-16C/Ds will weaken Lockheed Martin's plans to extend the production line for the fighter.
"While Congress has been notified of Oman and Iraq's desire for F-16s, the Taiwan order for 66 aircraft is very important to the long-term viability of the F-16 production to include the U.S. Air Force, Lockheed Martin and the thousands of suppliers throughout the U.S.," she said.
More than a few TADTE attendees said the Obama administration might reverse the decision as the 2012 presidential election approaches and political pressure for new jobs builds.
A June report by the Perryman Group, a Texas-based economic and financial analysis firm, estimated that Taiwan's F-16C/D program would create more than 16,000 jobs and almost $768 million in U.S. federal tax revenue. Much of that tax revenue and new jobs would go to election battleground states: California, Connecticut, Florida, Maryland, Ohio, Texas and Utah.
But China holds about 8 percent of U.S. debt, the largest block in foreign hands.
As one TADTE attendee said, "Beijing's Kung Fu is better than Washington's."
The denial of the new jets will likely lead AIDC officials to ask the government to expand upgrade plans for Taiwan's 126 Indigenous Defense Fighters, of which 71 are currently slated for upgrades.
The company has also been pushing Taiwan's Air Force to allocate funds for full-rate production of the IDF C/D Goshawk, which features improved range and weapons payload.

Background

In July, the U.S. State Department indicated a final decision on the F-16 issue would be made by Oct. 1. Since 2006, the U.S. has repeatedly denied Taiwan's request for 66 F-16C/D Block 50/52s, a prospective sale estimated at more than $8 billion.
The planes would replace 60 F-5 Tigers and 60 Mirage 2000-5s due for retirement within five to 10 years.
China has called the sale a "red line." A recent editorial in the state-controlled People's Daily called for the use of a "financial weapon" against the U.S. if new F-16s were released.
The U.S. decision comes as a blow to the self-ruled island's effort to counter China's growing military, whose first aircraft carrier began sea trials last week, and therefore to its independence.
There are fears that losing Taiwan could spell the end of U.S. power projection in the region. Losing Taiwan would "change everything from the operational arch perspective to the posture of Japan and the U.S." in the region, said Raytheon's Asia president, Walter Doran, a retired admiral who once commanded the U.S. Pacific Fleet.
Staff writer Dave Majumdar in Washington contributed to this report.

Sea Trials Begin for Chinese Aircraft Carrier

TAIPEI - China's state-run Xinhua News Agency announced Aug. 10 the beginning of sea trials for China's first aircraft carrier, the former Soviet aircraft carrier Varyag.

China's first aircraft carrier, the former Soviet carrier Varyag which China bought from Ukraine in 1998, undergoes refitting at the port of Dalian on July 4. The aircraft carrier started its first sea trial Aug. 10, the state news agency Xinhua said (AFP)

"China's refitted aircraft carrier left its shipyard at Dalian Port in northeast Liaoning Province on Wednesday morning to start its first sea trial," said the Xinhua report. "Military sources said that the first sea trial was in line with schedule of the carrier's refitting project and would not take a long time. After returning from the sea trial, the aircraft carrier will continue refit and test work."

Photos of the Varyag indicate it has been outfitted with an active phased array radar (similar to the U.S. Aegis System), a Type 381 Sea Eagle Radar, a 30mm Type-1030 close-in weapon system, and an FL-3000 Flying Leopard air defense missile system.
The large number of personnel on board recently and the testing of the engines, with smoke belching from the funnel, indicate that the propulsion systems have been installed and the ship is reaching seaworthiness, said Gary Li, an intelligence analyst for U.K.-based Exclusive Analysis.
Debate and mystery still surround the former Kuznetsov-class carrier. Procured by a Hong Kong travel agency in 1998 for $20 million, purportedly to serve as a casino in Macau, the Varyag has been the focus of debate among China watchers ever since it bypassed Macau for the Dalian Shipyard in northeast China in 2002.
The Chinese-language media are still arguing over whether the vessel will be christened the Shi Lang, after the Ming-Qing Dynasty naval admiral who conquered Taiwan in 1681, or Liu Huaqing, the father of China's modern Navy.
What is certain is that it will not be the last Chinese aircraft carrier. There are indicators, though anecdotal, that China is preparing to build up to three carriers at the Jiangnan Shipyard on Changxing Island in Shanghai.
Job-wanted advertisements in local newspapers have dropped hints the work is for a carrier program, Li said.
Li said one recent job advertisement for a heavy-lift vehicle contract said it sought "drivers to work on carrier project." There have also been reports by residents that "blonde foreigners," possibly Ukrainian engineers, have been seen living in a hotel near the shipyard.
Observers must be careful not "to fall into the trap of using every bit of gossip from some dockside fruit seller as fact," he said. China's carrier program has become a "heavy rumor mill." With 11 aircraft carriers at its disposal, the U.S. has little to fear from China's carrier program. Even if China had several aircraft carriers, "I don't think it will reshape the strategic balance much in favor of China," said Zhuang Jianzhong, vice director of the Center for National Strategy Studies at Shanghai Jiao Tong University.
However, Taiwan, the Philippines and Vietnam face a different scenario. China has threatened to invade Taiwan if it continues to resist unification. An aircraft carrier off Taiwan's eastern coast would close off access by the U.S. military coming to the island's aid during a war.
Vietnam and the Philippines have been facing problems with an aggressive Chinese Navy in the South China Sea, which China claims as a "core interest." On Aug. 3, the People's Daily, China's main Communist Party newspaper, warned the Philippines against building a shelter on the disputed Nansha Island in the Spratly Islands, calling it "a severe strategic error." As part of Vietnam's insurance against continued Chinese threats, the Navy is procuring Russian arms, including six Kilo-class attack submarines, two Gepard-class missile frigates and 20 more Sukhoi Su-30 fighter aircraft armed with anti-ship missiles. Vietnam's Navy has five aging Russian-built Petya-class frigates, two North Korean-built Yugo-class midget submarines, along with several missile corvettes. Any conflict between the navies of China and the Philippines or Vietnam would be an "unequal contest," said Carl Thayer, a Southeast Asia specialist at the Australian Defence Force Academy.
"China's South Sea Fleet should be quite capable in fending off any threats that Vietnam could offer. The Philippines Navy in its present state would be destroyed at a distance due to lack of sensors, appropriate strike weapons and air cover," Thayer said.
At present, the Vietnamese could land some punches, he said.
"Vietnam might be able to pull off a few surprises through deception with hit-and-run raids by guidedmissile fast-attack craft or by luring Chinese ships into range of its Bastion land-based anti-ship missiles," he said.
Vietnam possesses some "potent" anti-ship missiles but lacks the experience to stand up to China's South Sea Fleet.
Such a conflict would most likely occur with sufficient warning time for the Philippines and Vietnam to withdraw their naval forces and not engage in a head-to-head naval confrontation, Thayer said.
"The United States has promised to assist the Philippines with maritime domain awareness, and it is not inconceivable that the U.S. might forewarn Vietnam if China began to build up and deploy a naval force on Hainan Island," he said.
Chinese plans to field one or more aircraft carriers would change the equation. China's South Sea Fleet has already been improving 3-D combat at sea - surface, subsurface and air - with numerous exercises over the past two years. China could also bring in elements from the East and North Sea fleets to assist in any sea battle in the South China Sea.

CHRONOLOGY

* 1992: Soviet Union stops construction of the Varyag, a former Kuznetsov-class carrier, at 60 percent complete.Ownership is later transferred to Ukraine.
* April 1998: Ukraine puts the Varyag up for auction. The Chong Lot Travel Agency procures the ship for $20 million for use as a "casino" in Macau.
* 2001: Ukraine sells a prototype of the Sukhoi Su-33 carrier-borne fighter jet to Shenyang Aircraft Corp.
* March 2002: Vessel arrives in Dalian Shipyard, China.
* June 2005: Refurbishment begins.
* September 2008: The PLA Daily newspaper announces that 50 pilots were inducted at the Dalian Naval Academy to undergo training on ship-borne aircraft flight.
* 2009: A mock-up of the Varyag is constructed at the Wuhan Naval Research Facility near Huangjie Lake, Wuhan, China.
* 2010: Photos surface of the J-15 Flying Shark, which is identical to the Su-33.
* 2011: April: A People's Daily website reports the Varyag has entered its last stage, with the hull being painted light gray-blue, standard for all ships in the Chinese Navy.
* June 7: Gen. Chen Bingde, chief of the General Staff of the People's Liberation Army, admits in a newspaper interview with the Chinese-language Hong Kong Commercial Daily that China has an aircraft carrier program.
* July 27: The Chinese Defense Ministry officially confirms the Varyag is being refitted as a "scientific research, experiment and training" vessel.
* July 29: Gen. Luo Yuan, a senior researcher with the Academy of Military Sciences, tells the Beijing News that China would need a minimum of three aircraft carriers.


UAE Eyes F-16 as Rafale Talks Falter

PARIS - The United Arab Emirates (UAE) is talking with Lockheed Martin about buying more F-16 fighter jets because France's offer of an advanced version of the Rafale is seen as too expensive, said a source familiar with the negotiations in the Arabian Gulf.

Discussions on the F-16 pile pressure on Dassault Aviation, builder of the Rafale, to cut prices and on the French government to increase funding for upgrades seen as vital to sealing an export deal for the twin-engine combat jet with the UAE, analysts said.

In the 1990s, the UAE bought 80 F-16E/F fighters under a $7.3 billion foreign military sales contract.

"The UAE is finding the Rafale offer to be too costly compared to the capabilities of aircraft and other technologies on the market," the source said. "The negotiations with France are still ongoing, and both sides are looking for a compromise."

The UAE has been seen as a potential first export buyer of the Rafale in a deal estimated last year at $10 billion. Meetings on the sale of the French fighter took place at the Paris Air Show, which ended June 26.

But price resistance has led UAE officials to open discussions with Lockheed to buy more F-16s with the latest "weaponry and targeting sensors," the source said.

Last year, UAE officials asked for technical information on Boeing's F/A-18E/F Super Hornet following a political chill at the highest levels between Abu Dhabi and Paris.

In talks with the French, the elements said to be stretching the UAE's planned budget are the co-development costs for a more powerful "special" version of the Rafale, plus maintenance and spare parts. The UAE wants its Rafales powered by Snecma M88 engines, whose 9 tons of thrust would provide 1.5 tons more than the version flown by the French Air Force.

Other improvements requested include a longer-range active electronically scanned array (AESA) radar and a more capable Spectra electronic warfare suite.

The upgrades previously have been estimated at 2 billion euros ($2.9 billion) by then-French Defense Minister Hervé Morin.

Officials with Dassault Aviation declined to comment. Shortly before the Paris Air Show, Dassault Chief Executive Charles Edelstenne said of the Rafale offer to the UAE, "the talks are advancing."

The gulf source said, "Lockheed Martin is offering a very attractive financial package."

A UAE sale might help Lockheed keep its F-16 assembly line open after India rejected the U.S. fighter in its Medium Multirole Combat Aircraft competition.

Lockheed officials were unable to comment by press time.

France badly needs export success on the Rafale, a showcase of military technological competence, as the national defense budget assumes foreign contracts to help pay for a steady rate of production.

Dassault has said it must build 11 Rafales per year to keep the production line running at an economical rate.

Large companies depending on the Rafale include Safran subsidiaries Sagem for the forward-looking infrared gear and Snecma for the jet engines, as well as Thales for the electronics and RBE2 AESA radar, and MBDA, which hopes to sell the Meteor long-range missile.

The UAE's interest in the F-16 has forced Dassault to reduce prices, said Loic Tribot La Spiere, chief executive of think tank Centre d'Etude et Prospective Stratégique. Dassault has little room to maneuver as it must sell the Rafale, needed to boost "other opportunities" in export markets, he said.

Dassault hopes to sell the Rafale to Brazil, India and Switzerland, among other countries.

"Faced with this development, Dassault could go far in concessions, and the Emirates know it," Tribot La Spiere said.

But the U.S. also has an urgent need to boost exports, given its dire domestic economic situation, Tribot La Spiere said. The gulf is seen as a region that helps sustain U.S. activity.

"In this context, it is a safe bet that buying the F-16 aircraft could be seen, or rather proposed, as underwriting a security insurance policy: 'You buy this product and we will ensure your security, even internally,'" he said.

Research fellow Hélène Masson of think tank Fondation pour la Récherche Stratégique said the UAE's talks with Lockheed are a "radical means to put pressure on Dassault's offer."

The move may raise France's financial burden to pay for the Rafale's development, particularly the M88 engine.

"The central problem is really the funding for the aircraft's new functions, notably the engine," Masson said. "It's a way to say to the aircraft maker, and above all, the French Defense Ministry, that they must contribute more significantly to the development of this new version of the M88 and so reduce the financial cost to the UAE. ... Yes, this is really a chess game."

Dassault refuses, as a policy, to use company money to fund military aircraft development, insisting the government client pay.

The French Air Force is understood to be content with the current engine's performance, so it appears Paris must decide whether to further fund upgrades to win the UAE sale. That comes as France seeks to cut its public deficit.

In the 1990s, the UAE bought 80 F-16E/F fighters, with distinctive conformal fuel tanks, under a $7.3 billion contract through the Pentagon's Foreign Military Sales program. A reported $3 billion of that amount went to co-develop the Block 60 Desert Falcon, widely viewed as the most capable version of the F-16 worldwide.

As co-developer, the UAE is co-owner of some of the sensitive military technology on the Block 60 version. As part of the deal, UAE personnel worked on the co-development program, and Lockheed trained Emirati nationals to service the Block 60 aircraft.

The 1990s also saw the UAE buy Dassault Mirage 2000-9s, which were more advanced than the 2000-5 flown by the French Air Force. Older Mirage fighters were also upgraded to the more capable variant.

The Mirage 2000-9 fleet still has a long life ahead, but the UAE could start taking delivery of the new F-16s in under five years while keeping its Mirages, the source said.

France has offered to buy back the Mirage 2000-9 fleet and resell it in export markets to encourage the Rafale sale to the UAE.

The UAE has bought the Black Shaheen cruise missile for the Mirage. The UAE also has the long-range strike missile Hakim, which was shown under the wing of a Rafale model displayed in February on missile maker MBDA's stand at the IDEX arms show in Abu Dhabi.