November 19, 2014 / 9:49 PM / 4 years ago

Boeing says frustrated by Canada move to extend life of fighter jets

OTTAWA (Reuters) - U.S. aerospace giant Boeing Co is frustrated by Canada’s decision to extend the life of its aging fleet of fighter jets, a move that will delay a decision on buying replacements, a company official said on Wednesday.

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young

The comments were a rare public expression of unhappiness by Boeing about the way Canada is conducting the process to buy new fighters.

Lockheed Martin Corp’s F-35 is seen as the leading contender to replace Canada’s 80 CF-18 Hornet fighters, and the country could take delivery of an initial four F-35 jets in 2017 under an agreement with the U.S. military.

Canadian officials insist no decision has been made, and that Boeing’s F/A-18 Super Hornet remains in the running. Political sources say Ottawa is likely to opt for the F/A-18 if the F-35 does not win.

Canada said in September it would extend the life of its fighters to 2025 from the previous 2020 end-date. That could be bad news for Boeing, which is seeking orders to keep its F/A-18 production line running past 2017.

“We’re disappointed with the extension of the existing Hornets. We think that pushes the decision (on a replacement) off a little bit,” said Dan Gillian, Boeing’s vice president in charge of the F/A-18.

“If you don’t replace your aging fighters, they get more expensive and they get to be a challenge to maintain, and they become less relevant,” he told Reuters.

Canada announced a sole-source contract for 65 F-35s in 2010 but changed its mind in 2012 after a parliamentary watchdog savaged the decision. It is now mulling whether to hold an open competition or confirm the original decision to buy the F-35s.

“If there’s a competition we’ll compete,” Gillian said.

Some critics believe the government is determined to buy the F-35, but will put off the decision until after the next election, set for October 2015.

“Even if they announce they’ll go forth with a competition, there will be a time lag from that point to a source selection, whether it’s six months or a year,” Gillian said.

Boeing says it is confident it can maintain F/A-18 output through the end of 2017. Gillian said if more orders materialize, production lines could continue working beyond 2020.

Additional reporting by Andrea Shalal in Washington; Editing by Jeffrey Hodgson; and Peter Galloway

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