As F-35 ramps up, legacy fighters face existential threat.

• Author: Insinna, Valerie

Assuming that Lockheed Martin's F-35 eventually dominates foreign military markets, most fourth generation fighters will be pushed out of production.

After 2018, the F-35 is likely to capture over a 50 percent share of the global fighter jet market, says Richard Abou-lafia, aerospace analyst for the Teal Group, in a February report. At about the same time, most U.S. and European fourth generation fighters are scheduled to end production, with many manufacturers exiting fighter jet production altogether.

"It's not a positive picture. It's a very difficult future for the fighter industrial base globally," Aboulafia tells National Defense.

Few countries require large numbers of fighter jets, and the market is too crowded to support so many manufacturers, says Doug Royce, an aircraft analyst for Forecast International.

"There are too many models chasing too few orders," he says. The F-35 is "looking to have a very significant international presence that will probably suck up most of the orders from U.S. allies."

The United States is home to only two manufacturers of fighter jets--Lockheed Martin and Boeing--a result of rapid consolidation in the 1990s. Both companies are battling for sales to extend the lines of their fourth generation fighters. Under current plans, Lockheed's F-16 and Boeing's F-15 and F/A-18E/F Super Hornet will go out of production by 2020.

The situation is not much brighter tor turopean manufacturers. The Eurofighter Typhoon--designed by a consortium of U.K.-based BAE Systems, Italian aerospace company Alenia Aermacchi and the Franco-German Airbus Group--will leave the market by 2018 unless there are further orders. If France's Dessault retains its order from India, it could produce the Rafale until about 2025. Abou-lafia says both scenarios are unlikely, and both companies likely will exit the fighter business within the next decade.

Of the European companies, only Sweden's Saab appears likely to survive as a fighter manufacturer, partly because its single-engine Griper' NG is not a competitor for the more sophisticated F-35, Royce says. The Gripen in 2013 unexpectedly won a contract from Brazil to purchase 36 aircraft.

"But even the Gripen has trouble lining up export customers," Royce says. "It's just a tough market because these aircraft have become so expensive and they're competing for defense dollars with other weapons systems."

The impact of the joint strike fighter on the European defense industry could be enormous. If the F-35's price decreases to about $85 million per unit, "the F-35 may do to Europe's defense industry what the F-16 almost did: kill it,"Aboulafia's report says.

"America's aerospace industry knows this, and it helps explain...