Radar Upgrade for Hawkeye Could Bolster Sales Abroad.

The U.S. Navy's E-2C Hawkeye carrier-based surveillance aircraft could improve its chances for more international sales after it receives a new radar later this decade, said industry executives. A Hawkeye equipped with a more sophisticated radar, these officials said, would be more competitive internationally, against the up-and-coming Wedgetail early-warning and control aircraft that Boeing is building for Australia.

The U.S. Navy had planned to develop the new radar since 1998, but did not receive funding until fiscal year 2002. In this year's budget, the Bush administration requested $96 million to begin development of the so-called radar modernization program (RMP) for the Hawkeye.

The RMP is part of a broader plan to field an Advanced Hawkeye, as a follow-on to the Hawkeye 2000, deliveries of which will begin this fall. The prime contractor is Northrop Grumman Integrated Systems Sector, in Bethpage, N.Y. The Advanced Hawkeye will have an electronically-scanned array (ESA), which would replace the current mechanically-scanned rotating radar. In addition to the ESA antenna, the RMP will include improved electronic-support measures and a new tactical cockpit. The airplane will keep its trademark rotor-dome, so the new radar will be designed to fit within that space. Program officials decided that it would be too costly to redesign the aircraft.

While the upgrades for Hawkeye 2000 focused on communications and networking capabilities, the Advanced Hawkeye's cornerstone feature will be the radar. The goal is to expand the Hawkeye into new mission areas, such as theater-missile defense, overland cruise-missile defense and littoral surveillance, said Philip A. Teel, sector vice president for airborne early-warning and electronic-warfare systems at Northrop Grumman.

Outside the United States, the Hawkeye has been sold to France, Taiwan, Japan, Singapore and Egypt. Northrop Grumman expects to deliver three new aircraft for France and Taiwan in 2003 and 2004. The company also is scheduled to upgrade--with new mission computers and tactical displays--Japan's 13 Hawkeyes and Egypt's five aircraft between now and 2006. The United Kingdom, meanwhile, is considering purchasing up to six Hawkeyes, said Gary O'Loughlin, the company's director of international business development.

Teel and O'Loughlin spoke with National Defense during the 2001 Paris Air Show.

It was reported during the air show that Northrop Grumman was discussing a possible partnership with Fairchild Dornier, maker of commercial business jets, to compete in the international AEW&C (airborne early warning and control) market. In that market today, the system to beat is Boeing's 737-700 jet equipped with the Mesa (multi-function electronically-scanned array) radar, which is made by Northrop Grumman's electronics sector, in Baltimore, Md. The system is called Wedgetail, because that was the name of the Australian program won by Boeing.

In some areas of the world, the Wedgetail system will be competing against the Hawkeye, pitching the Bethpage and the Baltimore divisions of Northrop Grumman against each other.

During a meeting with reporters at the air show, William R. Adams, vice president of airborne early-warning systems at Northrop's electronics sector, was asked how his Wedgetail team handles the competitive relationship with the Hawkeye group. "Very carefully," he said, without elaborating.

The Advanced Hawkeye, O'Loughlin said, will have a good chance of scoring sales in international AEW&C contests, said O'Loughlin.

The capabilities of the new radar in the Advanced Hawkeye would be "equivalent or better" than the current Wedgetail system, he said.

Teel, however, cautioned that, by the time RMP is fielded, the Mesa radar probably will have undergone upgrades to its capabilities. "I don't know what their evolutionary path is," he said. "Compared to [the Wedgetail] capability today, we can make an assessment, but we don't know what their upgrades will be."

A partnership with a jet maker, such as Fairchild, would allow Northrop Grumman the flexibility to compete both with the turboprop Hawkeye and with a jet platform. Even though the Hawkeye's price tag is about a third of the cost of the 737-700 AEW&C platform, both Teel and O'Loughlin agreed that many countries today prefer jets to props, despite the cost premium.

"We have had some discussions with Fairchild," said O'Loughlin. The company's 728 jet, he said, "seems to be able to handle the Advanced Hawkeye system.

Fairchild officials told reporters at the air show that a 728-based AEW&C platform would be less expensive than Boeing's 767- and 737-based systems.

But the issue is not the cost, but rather whether there is a legitimate market for a jet-based Advanced Hawkeye, said Teel.

What Northrop Grumman must evaluate, he said, is "what market is left available to compete head-to-head with Wedgetail. If it looks like the costs of [a jet-based Advanced Hawkeye] are significantly lower than Wedgerail and performance is similar, then the answer is yes," said Teel. "That is part of what we are exploring with Fairchild." The 728 is similar to, but less expensive than the Boeing platform, he said. "But there is a non-recurring cost to enter the market and the integration required."

Northrop Grumman also is looking at other potential platforms, in addition to the Fairchild 728 and 928 jets. "Airbus has one or two in that category," said Teel. The key question that needs to be answered, he said, is "what does the market want?

"If we had a product that was comparable in performance to the Advanced Hawkeye, or something better than the Hawkeye 2000, in a jet platform, that was 70 percent the cost of the Mesa system," it would make sense to compete, he said. Further, "by the time we got it to market, would the market still be available?"

In the near future, Teel does nor expect a significant growth in the international market for E-2Cs. He agreed with Boeing's estimate that, during the next 10 to 15 years, there will be a market for about 50 AEW&C aircraft, but he stressed that only a piece of that market would be suitable for the Hawkeye. "There is a piece of that market that is an E-2C market and another piece that is a Wedgetail derivative market," Teel said. He speculated that there could be a demand for up to 20 E2Cs during that period.

South Korea is looking for a new AEW&C platform, but Northrop Grumman ISS officials decided nor to compete, because they believe that South Korea's solicitation was slanted toward the Wedgetail system. However, they are prepared to jump into the competition if South Korea decides that it cannot afford the Wedgetail.

"It looked to us like the specifications seemed to be written around a particular product," the Mesa jet platform, said Teel. "We'll wait and see how this evolves before we become active participants. If they can't afford what they specified, then we have an opportunity to work with them on a more affordable solution."

Teel downplayed the rivalry between Northrop Grumman's Hawkeye and Mesa divisions. "We typically don't compete in the same markets," he said. "If the Koreans can afford to buy what they specified, then the Mesa is the answer. If they cannot, then ours is the product of choice. We do have a different segment of the market."

There are times, he said, "when customers write requirements broad enough that both of us can see how our systems can fit. Truly, in the early stages, we are in somewhat of a competition, because we are trying to convince the customer about which is the better way to go. In that sense, we are competing for the dollars.

"Up until the requirements are written, we are in competition. Typically, our approach is FMS-oriented. Our paying customer and under whose control we operate is the U.S. Navy. They will work hard to help us to get the system into countries they are interested in having interoperable capability with."

Another country that has been looking for an AEW&C system is Italy. But neither O'Loughlin nor Teel believes that the Italians are serious about buying in the near future. "They have been shopping for AEW to augment the NATO AWACS for seven to eight years," said O'Loughlin.

"In a sense, we are competing (against Mesa) in Italy," said Teel. "We are showing [the Italians] the cost-tradeoff value of what they get with the Hawkeye."

It appears that Italy may be interested in leasing Hawkeyes from the U.S. Navy, he said. Those would be older Group O Hawkeyes that the Navy had planned to retire. Even though the airplanes are old, they still have up to 25 years of service life to operate on land, O'Loughlin said. Carrier landings shorten the life of the airframe.