Defense News

Chile Decides To Buy F-16s

By TOM CANAHUATE DefenseNews.com Staff Writer

WASHINGTON — Chile plans to purchase between 12 and 16 new F-16 fighter aircraft from Lockheed Martin Aeronautics Co. Fort Worth, Texas, in a deal worth up to $600 million. The move ends a multinational fighter competition that lasted three years.

"The Chilean government has decided that Lockheed Martin’s F-16 is the plane of choice for the Air Force," a Chilean diplomatic source here told DefenseNews.com Dec. 27. He said the government in Santiago made the decision Dec. 27 and has authorized the Chilean Air Force to start negotiations with Lockheed Martin to finalize the deal, which could take up to a year to finish.

"The negotiations also will focus on offsets, and to that end, the Chilean government has established an industrial commission to study possible offset arrangements with Lockheed Martin," said the diplomat, who is involved in the aircraft sale. Offsets are a form of industrial compensation in exchange for a government’s purchase of imported defense equipment.

"The F-16 purchase is a significant deal for the United States because Chile, for years, has been leery of buying U.S.-made equipment," said Tom Baranauskas, Latin America analyst for Forecast International Inc., Newtown, Conn., a market research firm.

He said Chile probably will direct some offset work toward Empresa Nacional de Aeronautica de Chile, El Bosque Airbase, Santiago, which is owned by the Air Force and provides maintenance work on military and civilian aircraft.

The other contenders in the Chilean fighter competition included the F/A-18 by Boeing Co., Seattle; the Mirage 2000 from Dassault Aviation, Vaucresson, France; and the JAS 39 Gripen, produced by Saab AR, Linkoping, Sweden, and marketed worldwide by BAE SYSTEMS plc, Farnborough, England.

"This particular procurement has been in the works for two or three years and, given the amount allotted to the purchase of new planes, represents a victory for the Chilean Air Force," said Baranauskas.

Officials with Lockheed Martin were not immediately available to comment on the Chilean decision to purchase the F-16s.