MarketLine Blog

Posts about Defense

Qatar Eurofighter Typhoon deal: BAE sale should not distract from harsh reality of lost markets


The decision of the Qatari government to buy 24 Eurofighter jet aircraft built by BAE is useful but should not disguise a stark reality: at present the jet is losing out badly to the French made Rafale, especially in what were formerly highly productive markets in the Arabian Gulf. The danger in placing too much faith, or emphasis, in attempting to turn around sales is that very few nations have the available resources to buy in the numbers BAE would ideally like. The current geopolitical problems in the Gulf suggest… Read more

Airforce modernization picks up pace in the Middle East


Tension in the Middle East has been expanding in recent years as the emergence of a new de factor leader in Saudi Arabia has led to the country reacting aggressively to what it perceives to be an expansion of Iranian influence and power in the Middle East. This tension is ultimately leading to a de facto arms race between the two powers wherein both also seek to stay ahead of the other from a technological point of view. Sanctions whilst holding back Iran in recent years have now been removed,… Read more

NATO: Defense spending rises as members look to a future without US leadership


In a recent meeting of the North Atlantic Treaty Organization (NATO), between the defense ministers in June 2017, it was heard that almost across the board there has been an increase in defense spending. Despite the target of 2% of GDP that members are expected to meet, traditionally many members have ignored this target in order to grow their economies or recover after recessions, but there are more members now hitting this target. There are multiple explanations for why members are spending more on defense all of a sudden. Firstly,… Read more

HMS Queen Elizabeth: Britain’s largest ever warship launches, but it has some concerning flaws


The Royal Navy’s largest ever commissioned ship is launched ready for sea trials in June 2017. The Queen Elizabeth Aircraft carrier is over three times larger than the class it replaces the invincible class and has absorbed £6bn ($7.6bn) worth of investment and has taken around 10 years to come to fruition. There are a number of questions that surround the project however and in particular the military procurement process in the UK in general. There are concerns that there will not be enough crew ready to operate her, the… Read more

Trump’s win is good news for US economy


Donald Trump’s whole mantra during his campaign (as evidenced by his rather natty headwear) has been to ‘Make America Great Again.’ In order to do this, he knows he must make the US competitive on the global stage. He has pledged to reduce taxes heavily for low and middle income Americans and also to make sure that the wealthy (including corporations) do not pay too much as that undermines jobs. This should help boost the currently questionable level of job creation and to increase spending power, which should in turn… Read more

Amazon Web Services, revolutionizing cloud computing


Amazon Web Services (AWS) was developed alongside the online retail giant’s vast e-commerce from the world’s largest online retailer’s inception. Although having built its reputation and brand recognition on its retail operations, Amazon has gone on to expand its offerings into products and services as diverse as media, electronics and cloud computing. Responsible for over 4% of Amazon’s revenues in 2013, AWS has seen Amazon sink over 10 years of development and millions of dollars of investment into the world’s largest cloud service provider. Available in over 190 countries worldwide,… Read more

Swiss reject $3.5bn Saab Gripen NG fighter deal in referendum


A referendum in Switzerland has seen a narrow rejection of the $3.5bn acquisition deal for next generation of Saab Gripen fighters. 53.4% of voters opposed the deal for 22 planes. Switzerland’s political process permits holding a plebiscite to reconsider a recently passed law if 50,000 signatures are collected. The Gripen had been selected in 2011, but had only reached Swiss Parliament approval in November 2013. The decision may have been due to considerations of neutrality, as Switzerland hasn’t deployed its military for over 200 years. In a recent crisis where… Read more

Israel heightens defense after rocket attack and amid Egyptian turmoil


Since the interception of a rocket launched allegedly from Sinai, and the growing instability in Egypt, the Israeli Defense Force (IDF) have bolstered their defenses by deploying a sixth Iron Dome battery near Eilat, which was the target of the rocket attack. The Iron Dome missile defense system has proven exceptionally effective in the past. During Operation Pillar of Defense in November 2012, five of the IDF’s Iron Dome batteries intercepted 86% of the 421 rockets aimed at populated Israeli areas. Israeli defense spending had a total budget allocation of… Read more

Rebel activity and drug trafficking cause South American government’s military budgets to explode


Introduction Global defense spending continues to grow, despite many developed nations implementing considerable cuts to their defense budgets as part of their austerity measures. Western Europe in particular has suffered, as the impact of the Eurozone crisis has been felt by many EU members. For many countries in Europe defense spending is seen as a politically ‘safe’ area to make cuts, particularly as operations in Afghanistan wind down. At the same time, North America is suffering from the US’ sequestration measures which resulted in a decline in spending in 2012…. Read more

Serco: A relatively unknown billion pound company


The UK based service company Serco, is a large services business entity that in popular UK media is a relatively low key and unknown business. Despite this the company is one of the key contractors in the UK and is widespread internationally. In 2012 the company turned over £4.9bn (approximately $7.4bn), with net income of £245.3m (approximately $374.2m) which is clear evidence of its scale and scope. Serco has an incredibly diverse business profile, but its key business area is providing governments with private sector contractor options, outsourcing essentially. The… Read more

EADS: Life after BAE? Flying High after the Failed Merger despite Challenges in the Defense Sector


The much vaunted merger of BAE Systems and EADS failed to materialize in October 2012 because of political deadlock, generating uncertainty regarding the future of both companies. The full results for the financial year 2012 show that EADS seems to be doing just fine. 2012 saw a 15% increase in revenues for the company, driving it to €56.5bn ($78.6bn) against 2011’s €49.1bn ($68.3bn). Airbus, Eurocopter and Astrium provided the boost, with defense remaining flat. Net income was up 20% to €1.9bn ($2.6bn). Order books were also up 5%. Shares peaked… Read more

Asia-Pacific and the Middle East & Africa Drive Growth in Defense Spending

  Defense spending continues to grow in 2011, with developed countries preparing to or already cutting their spending, and developing nations building their military capacity to match their economic power. Regional instability and changing security threats are the main reason for this growth. The global market expanded by 2.7% in 2011, to reach a value of $1.5 trillion, indicating a compound annual growth rate (CAGR) of 6.1% in the period 2007-2011. Personnel numbers declined with a compound annual rate of change (CARC) of- 1.6%, reaching a total of 12.5 million… Read more