Boeing expects growth in Southeast Asia defence market

[SINGAPORE] Boeing Co, the second-biggest US government defence contractor, expects Southeast Asian demand for defence equipment to grow rapidly as economic growth enables them to boost purchases.

"The Southeast Asian market isn't as large as other markets, but it's growing," James Armington, Boeing's vice-president for the East Asia-Pacific region, said in an interview in Langkawi, Malaysia on Thursday.

"Over the next decade, with the growth rate in this region we're going to see a significant increase in demand for defense equipment. It will grow very rapidly." Boeing and other companies are trying to attract Southeast Asian countries, such as Malaysia and Singapore, to purchase jet fighters, air-refueling tankers and other military equipment as regional disputes proliferate over territory and resources. Asia's defence-related market is expected to grow 3 percent annually over the next five years, Mr Armington said.

Malaysia, the first country outside Europe to have Airbus Group NV's A400M military transport plane, is considering replacing some of its aging fighters. Boeing plans to propose its Super Hornet jet for the bid, which hasn't opened yet, Armington said.

Boeing's defence and space business gets 30 per cent of its US$30.8 billion in last year's sales from outside the US, with a third coming from Asia, Armington said.

BOEING VS LOCKHEED

Competition to win military deals in Asia has mounted as budget cuts in the US and Europe push Boeing and its rivals to bid for Asian projects. Indonesia and the Philippines, for example, have ordered trainer jets, submarines and patrol vessels to strengthen their defences as tension in the region intensifies.

In recent years Boeing lost out on jet-fighter deals to Lockheed Martin Corp. in Japan and South Korea. It may get the chance to make up for those losses: Boeing has offered its KC46 tanker, which competes against Airbus's A330 multi-role tanker transport, to provide an air-refueling solution for South Korea. South Korea could decide on the potential purchase this summer, Armington said.

Boeing also plans to offer the KC46 in Japan, which is expected to open competition this year for air-refueling tankers, Armington said.

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