U.K. Defense Aero Sales Up, But Orders Fall

LONDON - British aerospace defense sales rose last year, but figures in the annual industry survey launched June 9 by the trade organization ADS confirmed the good times are coming to an end for the sector, as orders plummeted by nearly one-third compared with 2009.
Part of the defense orders downturn could be accounted for by the abnormally high bookings in 2009, but last year also saw the impact of a slowdown in defense spending in the U.K. and Europe, said Graham Chisnall, the managing director of aerospace and operations at ADS.

The survey, which is a barometer on the health of the aerospace sector here, said defense orders from Britain to the European Union slumped 65 percent to 1.43 billion pounds ($2.35 billion).
The European Union remained Britain's biggest customer overall in aerospace sales at 6.53 billion pounds. Sales to the U.S. came in at 3.07 billion pounds, an 8 percent boost.
U.K aerospace sector orders overall fell 11 percent to 29.1 billion pounds, but that was entirely due to the downturn in defense as order delays and weak bookings signaled tougher times ahead as many nations begin to cut defense spending to help resolve wider financial problems.
Britain's aerospace industry is reckoned to be the world's second-largest, behind the U.S., and a leading driver of high technology manufacturing in the U.K. Chisnall warned, though, that Britain would have to invest more in basic research and technology if it wanted to retain its position in the aerospace world.
Industry is investing heavily in program development but that masks the fact that work on enabling technology is "declining year-on-year in both sectors but is particularly prominent in civil aerospace," he said.
"A strong industry partnership together with sustained public and private investment will be crucial to maintaining the long-term future of the sector. We have made an encouraging start with high-level meetings that involve industry seniors and are chaired by Vince Cable [the government's business secretary] and Mark Prisk [the business minister]," he said.
Civil orders registered a 3 percent rise to 19 billion pounds. Sales in the sector were up 1.5 percent to 19 billion pounds, and Chisnall said growth projections in such places as China and India offered the potential for civil growth rates not seen before.
The growth was of such magnitude that it could replace the downturn in defense "if companies can exploit it," he said.
It wasn't all doom and gloom for defense, though. The story on revenues generated for the year by the defense aerospace industry was more upbeat with a 2.8 percent rise for the year to 12.11 billion pounds.
Even domestic defense sales rose marginally, by 0.6 percent. Chisnall said that figure had been boosted by government spending on urgent operational requirements for the British military fighting in Afghanistan.
With British combat troops due to be out of Afghanistan by 2015, spending on urgent operational requirements may not provide a sticky plaster for domestic defense aerospace sales for much longer.
Among the various defense sectors, the ADS survey pointed up a 27 percent slump in missile sales from the U.K. to 780 million pounds. The sector is dominated by MBDA but also includes Thales UK and Raytheon.
Defense still accounts for 52 percent of British aerospace sales. Just more than 30 percent of that comes from the export market. A graph produced by ADS showed Britain was massively more dependent on the export market for its total aerospace sales than either the U.S. or the European Union average.
The U.K. figure is 19 percent while, at the other end of the scale, U.S. dependency on its government for aerospace sales stands at 57 percent.

U.K. Reconsiders Its Rotor Wing Strategy

LONDON - Britain is reconsidering its military rotor wing strategy and expects to deliver a new plan to achieve an affordable force later this year, according to the Ministry of Defence.
News that a new rotary wing capability study was underway at the Ministry of Defence emerged at a land warfare conference held in London last week when the man leading the effort, Maj. Gen. Bill Moore, said work was being conducted to deliver a coherent helicopter plan in line with the government's scheme to restructure the military, known as Future Force 2020.

Moore, the MoD's director of battlespace maneuver, is heading a steering committee that includes senior officers from the Joint Helicopter Command and others.
The revised strategy is expected to be complete by the autumn, according to a MoD spokeswoman.
The MoD said in a statement that any significant changes to the helicopter strategy resulting from the review and from a separate three-month study of all defense sectors to better match priorities and budget resources would be announced to Parliament.
"The rotary wing capability study will re-examine defence's helicopter requirement to deliver the Future Force 2020 vision set out in the Strategic Defence and Security Review and ensure a balanced and affordable plan which delivers the right rotary wing force mix for defence," the MoD said.
The move comes as the government continues efforts to reduce defense budget deficits in response to severe cuts in funding over at least the next four years and the need to close a huge over-commitment in equipment spending over the next 10 years.
The rotorcraft capability work may herald cuts to helicopter procurement, but industry executives and the military here are keeping their fingers crossed that the study will result in only modest reductions across the helicopter fleet.
Requirements for equipment, training, basing and others areas will all be swept up in the study.
Civilian search-and-rescue requirements will also be looked at in the wake of the recent collapse of the SAR-H deal, which would have involved an industry consortium taking over from the military the role of running those services around Britain.
A new way ahead for providing search and rescue could emerge from the Transport Department later this summer.
The re-examination is the latest of several rotary wing studies undertaken by the British over more than a decade in an attempt to achieve coherence in what has proved a controversial area of defense operations.
The previous government was heavily criticized for a helicopter procurement policy that left the armed forces chronically short of lift capability in Iraq and Afghanistan. That problem was notionally resolved just ahead of Labour being ousted by the Conservative-led coalition in May 2010 by an order of 22 new Chinooks from Boeing plus replacement of two additional machines written off in Afghanistan.
The new government cut the plan to 12 plus 2 Chinooks and last year handed over money to Boeing to start working on long-lead items and a design review. A production order has not yet been signed but a Boeing spokesman said they expected the first aircraft to be on the assembly line in Philadelphia next year.
Britain plans to start drawing down its forces in Afghanistan ahead of a complete withdrawal of combat troops by 2015, but Moore told the Royal United Services Institute conference in London that the MoD still "needs to buy additional Chinooks to improve our lift; our lift at the moment will not allow us to do what the government requires us to do."
The MoD said in the statement it remains committed to the plan to buy 12 additional Chinook helicopters for the Royal Air Force, as well as the attrition buy of two machines.
"We are currently negotiating with industry on the main investment decision on these helicopters," the statement said.
Boeing reinforced that message, telling reporters in the U.S. on June 7 that the number of helicopters under discussion remained as advertised.
One industry executive, though, said he had heard the number may slip to single figures and a second executive said the "odds on achieving 12+2 are very long at the moment." That was denied by the Boeing spokesman.
The British plan is to reduce helicopter types to the Chinook and Apache attack helicopter from Boeing, the Wildcat and Merlin machines from AgustaWestland, and the Eurocopter Puma, which is being upgraded. The Sea King is scheduled to come out of service in 2016.
Moore said the Puma improvement was needed quickly to "drive resilience for Afghanistan".
The Sea King will exit service in 2016 and Merlin will transfer to the Royal Navy for use to lift the Royal Marines from their present battlefield lift role with the Royal Air Force, Moore said.
"We have Wildcat coming into service but we have to do something with our [Apache] attack helicopter. We have the capability sustainment program and we need to build on that, and probably need to align ourselves with the U.S. Block 3."
A replacement for the Lynx helicopter, the Wildcat is scheduled to be in service with the Army in 2014 and the Navy the following year. The machine will provide reconnaissance, troop transport and other roles in the Army while in the Navy its prime use will be as an anti-surface combatant.

Nuclear-Capable Missile Test Successful: India

BHUBANESWAR, India - India on June 9 tested a short-range nuclear-capable missile along its eastern coast, an official said, part of the nation's efforts to build up its atomic deterrent.
The surface-to-surface Prithvi-II missile was fired from a range in the eastern state of Orissa and hit its target in the Bay of Bengal successfully, the defence ministry official said.

The Prithvi, which is domestically built and developed, can carry nuclear or conventional payloads and has already been inducted into the armed services.
India's Defence Research Development Organisation is developing a series of missiles as part of the country's deterrent strategy against neighboring Pakistan and China, who also have nuclear weapons.
The fourth test of the 30-foot Prithvi-II was a routine part of training exercises for the Indian armed forces, officials said.
With a striking range of 200 miles (350 kilometers), the missile is capable of carrying a 2,200-pound (1,000-kilogram) warhead.

China Plans Naval Exercises in Western Pacific

BEIJING - Chinese state media reported June 9 that China would conduct naval training drills in the western Pacific later this month, amid lingering fears among Beijing's neighbors about its military ambitions.
The exercises will take place in international waters and are "not targeted at any specific country," the defense ministry said in a statement carried by Xinhua news agency.

The ministry did not offer further information about the location of what it called a "regular" drill, nor did it say which ships would participate.
Military observers are keenly awaiting the launch of the country's first aircraft carrier, which is currently based in the northeast port city of Dalian.
Earlier in the week, a top official in China's People's Liberation Army gave the first confirmation of the existence of the carrier in an exclusive interview with the Hong Kong Commercial Daily.
Gen. Chen Bingde, chief of the General Staff of the PLA, said the 990-foot refurbished Soviet carrier "is being built, but it has not been completed," without elaborating.
Qi Jianguo, another PLA general staff official, told the newspaper that the carrier would not enter other nations' territories, in accordance with Beijing's defensive military strategy.
"All of the great nations in the world own aircraft carriers - they are symbols of a great nation," Qi was quoted as saying.
China is involved in a number of simmering marine territorial disputes with its neighbors.
It has claimed mineral rights around the disputed Spratly Islands in the South China Sea, and argued that foreign navies cannot sail through the area without Beijing's permission.
In April, Adm. Robert Willard, head of U.S. Pacific Command, nevertheless said China's navy had adopted a less aggressive stance in the Pacific after protests from Washington and other nations in the region.

Russia Says NATO Not Listening on Missile Shield

BRUSSELS - NATO and Russia failed to reach a breakthrough on a missile shield project in Europe on June 8 with the Russian defense minister complaining that Moscow's demands were falling on deaf ears.
After talks between NATO defense ministers and their Russian counterpart in Brussels, NATO Secretary General Anders Fogh Rasmussen dismissed Russian demands for a legal guarantee that the project was not directed at Russia.

"It would be in the interest of Russia to engage in a positive cooperation with NATO and focus on real security challenges instead of some ghosts of the past that don't exist anymore," Rasmussen said.
Russian President Dmitry Medvedev agreed at a NATO summit in November to explore the possibility of cooperating with the former Cold War foe on a system to protect Europe's population from the threat of ballistic missiles.
Fearing that the system would undermine its nuclear deterrent, Moscow has since then demanded a legally binding guarantee that the missile shield was not aimed at Russia.
The Western military alliance has also rejected Medvedev's idea of dividing the European continent into sectors of military responsibility, with Rasmussen saying the two sides should keep their systems separate.
"NATO is not hearing us for the moment," said Russian Defence Minister Anatoly Serdyukov. "NATO's position is not acceptable to Russia," he said, adding however that Russia still hoped to reach an agreement.
Despite the lack of a breakthrough, Rasmussen said he was optimistic that a deal could be reach in time for the next NATO summit hosted by the United States in May 2012.
"The Russians have their positions and their interests, we have our positions and our interests, and now the political challenge is to build a bridge and we still have some time," he said.
"I would expect us to make steady progress. It would be hard work but I'm still optimistic. I think at the end of the day we can reach a solution."
In the meantime, NATO defense ministers adopted an action plan on June 8 to forge ahead with the missile shield project, which an alliance official said is expected to be completed by 2018.

NATO Plans Force to Respond to Cyber Attacks

TALLINN - NATO wants to beef up its cyber defense capabilities with the creation of a special task force to detect and respond to Internet attacks, an alliance expert said at a conference on cyber security here on June 8.
"NATO is planning to establish the Cyber Red Team (...) that would provide a significant contribution to the improvement of NATO's cyber defense capability," Luc Dandurand and expert with NATO's C3 Agency told delegates to the alliance's third annual cyber defense conference.

The new NATO cyber force could be involved in simulating threats and controlling readiness to response, gathering and using public information from open sources, scanning and probing networks as well as conducting denial-of-service attacks against specific services or networks, according to Dandurand.
The Symantec cyber security firm recently reported that web-based attacks in 2010 were up 93 percent from 2009.
"The need for such a team is obvious," Dandurand said, adding it would primarily be tasked with detecting, responding to and assessing the "damage cyber attacks can cause in a military sense."
Dandurand also highlighted legal and privacy issues that must be addressed before NATO's cyber force can take shape.
"The two main issues identified at this point are the need to legitimize the Cyber Red Team activities that could otherwise be construed as the malicious or unauthorized use of computer systems, and the potential for invasion of privacy resulting from cyber red team activities," he told experts gathered at NATO's Tallinn-based Cyber Defence Centre.
"Cyber-attacks against Estonia in the Spring of 2007, during Russia's operation in Georgia in 2008, and the many more cyber attacks we have seen worldwide since then have shown us there is a new kind of war that can cause a lot of damage," Maj. Gen. Jonathan Shaw, a British defense ministry official told delegates.
"We need a response system and we need to learn to respond fast. In the cyber world you have to do lot of homework before the attack in order to be effective," he added.
The three-day conference, which kicked off June 7 and is attended by 300 international cyber experts, focuses on the legal and political aspects of national and global Internet security.

NATO Addresses Cyber Security at Tallinn Meeting

TALLINN, Estonia - Three hundred global cyber experts gathered in Tallinn on June 7 for a NATO Cyber Conflict conference focused on the legal and political aspects of national and global Internet security amid a rise in attacks.
"The special focus at the conference this year is on generating cyber forces (...) the technologies, people and organizations that nations require to mitigate cyber threats that have been increasing with rapid speed," Col. Ilmar Tamm, head of NATO's Tallinn-based Cyber Defence Centre told AFP as the forum got underway .

According to Tamm, the Symantec cyber security firm recently reported that "web-based attacks in 2010 were up 93 percent from 2009."
"This calls for frameworks in both legal and strategic aspects which would guide the decision makers on how to act on these cases," Tamm said.
The Tallinn conference will coincide with a NATO defense ministers' meeting in Brussels where a new cyber defense policy for NATO will be adopted.
Meanwhile, at the third annual Tallinn meeting, experts from 37 countries are to share cutting-edge cyber security research, Tamm explained.
Among others, Ralph Langner, the German computer scientist who conducted much of the ground-breaking research on the Stuxnet worm, will present an analysis of what has been called the world's first cyber weapon.
Keir Giles from the U.K. Conflict Studies Research Centre is to analyze global cyber attacks from Russia and whether they can be seen as acting under a so-called Russian Cyber Command.
Talks will also focus on the recent U.S. government decision to treat cyber attacks as military attacks and make relevant legislative changes.
"The support the U.S. initiative has got in many other states, including Estonia and the U.K., indicates nations' increasing willingness to discuss military responses to cyber attacks," Tamm told AFP.
"With cyber incidents becoming more and more intrusive, it is a logical step for militaries to develop capabilities to counter cyber attacks and be prepared to engage in proportional response to cyber attacks," he added.
Though in practice, "it will be challenging to tailor a cyber response that would respect the rules of combat related to civilian objects and collateral damage," he added.