Raytheon Missile, Lockheed F-16 Jet Top Foreign Military Sales

Raytheon Co.‘s advanced air-to-air missile and Lockheed Martin Corp.‘s iconic F-16 fighter aircraft dominated U.S. foreign military sales as the most popular weapons sold to allies in fiscal 2019.

The U.S. proposed the sale of the AIM-120C-7 medium air-to-air missile, made by the Waltham, Massachusetts-based company to five countries, including Bahrain, Qatar, Japan, Australia, and Hungary. Aircraft equipped with the AIM-120 can attack several targets simultaneously. The missiles are guided to their intercept by an active radar.

The air-to-air missile was initially conceived as part of an agreement between the U.S. and several members of the North Atlantic Treaty Organization, making it one of the most sought-after weapons.

The missile sale, with a price tag of about $2 billion, is only a small part of $56.2 billion in announced foreign military sales in 2019, the data compiled by Bloomberg Government show. The Trump administration has ramped up weapons sales and has ordered government agencies to expedite and expand arms sales abroad. The data is based on notifications of impending foreign military sales the State Department sent to Congress.

U.S. arms sales have grown during the Trump administration. The Defense Security Cooperation Agency said foreign military sales in fiscal 2018 were already 33% higher at $55.7 billion, compared with the previous year.

‘Can Cut Both Ways’

The State Department this year is looking to expand the U.S. military sales market share, a senior official told reporters this month. The U.S. will train its focus on bolstering partners that are seeking to become closer not only with the U.S, but be able to have common equipment with other partners. NATO states or those nations aspiring to become members of the alliance would be examples, as well as allies in the Indo-Pacific region that are looking to counter China’s reach, the official said.

The focus on military sales is “good for U.S. contractors,” many of whom have seen an increase in international sales as a percentage of of their total sales, said Byron Callan, managing director of Capital Alpha Partners. International sales can also help when “domestic sales growth can slow down,” particularly with national security funding set for fiscal 2020 and 2021.

Nonetheless, the increase in foreign sales “can cut both ways,” Callan said. A case in point was the debate about and congressional opposition to the weapons sale to Saudi Arabia and the United Arab Emirates over their involvement in the civil war in Yemen that has resulted in one of the world’s worst humanitarian crises. President Donald Trump vetoed the legislation seeking to block the arms sales.

“There are few days in this body when we can say our votes will save lives,” Sen. Bob Menendez (D-N.J.) said before the Senate unsuccessfully voted to override the veto last July. “Today is such a day.“

Iconic Fighter

Lockheed Martin’s F-16 fighter is responsible for the highest price tag in fiscal 2019. The U.S. announced F-16 sales of $14.5 billion last year. A large part of that is Taiwan’s commitment to buy 66 F-16Vs, worth about $8 billion. Bulgaria and Morocco rounded out the F-16 orders for 2019.

China considers Taiwan a renegade province and the U.S., previously wary of antagonizing Beijing, hadn’t agreed to sell advanced fighter jets to Taiwan since President George H.W. Bush announced the sale of 150 F-16s in 1992. The Obama administration rejected a similar Taiwanese request for new jets but agreed to update its existing fleet.

The foreign military sales program allows allied nations to purchase weapons systems and other hardware that are also used by the U.S. military. The Defense Security Assistance Agency manages these sales and receives a small management fee. Sometimes the U.S. government funds these through foreign military assistance and others are paid for by the countries themselves. After the notifications of the sales are made to Congress the weapons may not be delivered for several years.

Who Buys Most?

Foreign governments and other organizations may also purchase military hardware through direct commercial sales, which do not go through the U.S. military but are licensed by the State Department. Data on these sales can be found here, but they aren’t included in the foreign military sales totals.

Most proposed weapons sales were for the Asia-Pacific region with preponderance towards Japan and South Korea–both allies threatened by North Korea’s nuclear ambitions. The Middle East was the second busiest region buying U.S. weapons with sales to Saudi Arabia, Bahrain, United Arab Emirates, and Morocco. Europe came in third with Germany, Lithuania, Bulgaria, Hungary, Denmark, Greece, Spain, and the U.K. all ordering U.S. arms.

Bloomberg Government clients can track foreign military sales through BGOV’s FMS Dashboard found here.

To contact the authors: Roxana Tiron in Washington at rtiron@bgov.com; Robert Levinson in Washington at rlevinson@bgov.com

To contact the editors responsible: Paul Hendrie at phendrie@bgov.com; Robin Meszoly at rmeszoly@bgov.com

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