Thursday, September 9, 2010

Ending U.K. Carrier Program One Option Under Review

BAE Systems has been tasked by the British government to look at a number of options on the Royal Navy's aircraft carrier build program including axing the project, said company Chief Executive Ian King.

The BAE boss told the parliamentary defense committee here that in the last week the government had asked the company to look at a range of options including "one carrier and no carrier."

An industry alliance led by BAE is contracted to build two 65,000-ton aircraft carriers at a cost of 5.2 billion pounds ($7.9 billion). The first of the two, HMS Queen Elizabeth, is under construction and is scheduled to enter service in 2016 followed by the second vessel in 2018. In July, BAE said the alliance had placed contracts worth about 1.25 billion pounds to suppliers on the program.

Previously, MoD officials had indicated that Britain might look at using one of the warships as a strike carrier while employing the second as a helicopter carrier for amphibious landings.

The British have been planning to acquire up to 138 vertical/short-takeoff and -landing (VSTOL) versions of the F-35 Joint Strike Fighter to equip the carrier and provide the Royal Air Force with a strike aircraft. Even with the carrier program in place, industry executives have been saying in recent months that the actual purchase of F-35s could be halved.

There has also been media speculation that Britain could dump the VSTOL version of JSF in favor of a conventional aircraft for the carrier. The warship was designed from the outset to be able to operate VSTOL or catapult operated aircraft.

At the start of this year, ministers in the previous Labor government told MoD project teams to cost out the financial impact of canceling or varying a number of programs, including the aircraft carriers.

Britain is conducting a strategic defense and security review that could lead to a large number of capability and program cuts. The Treasury here has told the MoD it will have to cut its budget over the next four years by between 10 and 20 percent to help reduce the government's huge public debt.

In addition, over the 10 years the MoD has unfunded liabilities in the equipment and support sector of more than 20 billion pounds, Defence Secretary Laim Fox said in a speech last month.

The defense review and the departmental budgets for the next four years are scheduled to be revealed by the government in late October. The National Security Committee is expected to start considering the proposals from the MoD next week.

Defense analyst Alex Ashbourne-Walmsley said the late request by the government to look at a number of options, including axing the carrier program, suggested the MoD was struggling to find the cuts required.

"It's an ominous sign that the cuts proposals haven't reached the scale expected by the National Security Committee," Ashbourne Walmsley said. "Cancellation would have a devastating impact on the small to medium companies supplying the program and call into question Britain's future shipbuilding capabilities, unless other significant work is put in its place."

Giving evidence to the defense committee, King also said BAE was trying to reduce the cost of the upcoming renewal of Britain's nuclear missile armed submarines. One of the options being considered is the timing of a program, which is estimated to cost between 15 billion pounds and 20 billion pounds to replace the existing fleet of Vanguard-class nuclear submarines.

The MoD stuck to its usual response regarding possible cuts in the October defense review.

"The defense secretary has made clear that tough decisions will need to be made but the complex process of a Strategic Defence and Security Review will be concluded in the autumn and speculation at this stage about its outcome is entirely unfounded," said a spokesman for the department.

One industry executive said a decision to build no carriers is extremely unlikely, but that the MoD is crunching the numbers on one vessel.

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