Speaking to reporters at Embraer’s civil aircraft production facility in São José dos Campos last month, the company’s president and CEO, Francisco Gomes, said that C-390 has “a good sales momentum” and he is “very excited” about further opportunities in coming years.

“Farnborough will be the best show ever for Embraer,” Gomes predicted.

Embraer will display two C-390s at the show, representing the first two customers – Brazil and Portugal.

Embraer holds 40 commitments for the turbofan-powered C-390 and on June 26 it delivered the second of five aircraft to the Portuguese Air Force. Portugal’s aircraft are “NATO Standard” aircraft with Link 16 and NATO-compatible communications and encryption systems.

“The Portuguese opened the door for us in the NATO community and we’re expanding our relationship with the Portuguese government and Portuguese Air Force,” Bosca da Costa Jr., head of Embraer’s defense and security arm, told Defense News.

“We’re expecting to deliver two additional units: one for Hungary and another for Brazil (and) we’re expecting to end 2024 with ten aircraft in service around the globe.”

NATO countries form one of four strategic markets for the C-390 identified by Embraer, with the others including India, Saudi Arabia and the United States.

India is looking to replace its Soviet-era Antonov An-32 transports under Delhi’s Medium Transport Aircraft (MTA) program, and da Costa says it has a requirement for between 40 and 80 aircraft, with a decision anticipated in the next two to four years. To meet the government’s “Make in India” requirements, Embraer has teamed with Mahindra Aerospace.

“We have a strong localization plan as a requirement in this campaign, and that’s the reason Embraer has chosen Mahindra as a partner,” da Costa said. “We’re shaping the campaign together and, if successful, we are expecting to establish a final assembly line for the aircraft in India.

While da Costa says Saudi Arabia doesn’t yet have an open tender for its C-130 Hercules replacement program, he sees a potential for about 25 C-390s.

“We’re in an early engagement phase with them and we’re also expecting a decision in the next two to four years,” he said.

Da Costa adds that the United States is another important potential market for the C-390.

“We believe the C-390 will play an important role in the U.S. market and we are there trying to pitch the C-390 to the U.S. Marine Corps and U.S. Air Force Special Operations Command, because we do believe the C-390 would add additional value to those entities,” he said.

Overall, da Costa sees a potential market for 500 aircraft over the next 20 years, as countries seek to replace their ageing fleets of C-130s and Russian transport aircraft. Of this total, he estimates 206 aircraft will be needed in the near-term to replace aircraft that are already 45 years old.

“The C-390′s ready to capture a good portion of this market and that’s the reason we’re so optimistic about the future of this airplane,” he said. “In the coming months we are expecting to announce some good news and we’ll have more to share at Farnborough.”

The Pitch Black exercise is the latest in a biennial series that began 43 years ago as a unilateral drill, before becoming a joint Australia-U.S. training event in 1983. Since then it has grown in step with the increasing geopolitical importance of the Indo-Pacific region.

The three-week exercise will run July 12-Aug. 2. This year, Pitch Black will see 20 nations taking part. Of these, 16 are contributing combat jets to the exercise, which will see more than 140 aircraft and over 4,000 personnel participate.

The actively participating nations this year are Australia, France, Germany, India, Indonesia, Italy, Japan, Malaysia, Papua New Guinea, the Philippines, Singapore, South Korea, Spain, Thailand, the United Kingdom and the United States. In addition, Brunei, Canada, Fiji and New Zealand will have personnel embedded in the exercise.

Countries attending this series for the first time include Italy, Spain, Papua New Guinea and the Philippines. And in a first for the exercise itself, an aircraft carrier will dedicate its time to the event, in the form of the Italian Navy’s ITS Cavour.

European presence

A pan-European force made up of the French, German and Spanish air forces is deploying first to Alaska under an overarching deployment effort, dubbed Pacific Skies, before making its way into the Pacific. Under that umbrella operation, those nations will participate in the Alaska-based exercise Arctic Defender, then continue into the Pacific where they will join the Rim of the Pacific drills off Hawaii, the exercise Nippon Skies in Japan, Pitch Black in Australia, and Tarang Shakti drills in India.

The strong European presence in the Indo-Pacific comes amid regional tension, as noted in the Australian government’s National Defence Strategy released in April.

“Entrenched and increasing strategic competition between the United States (US) and China is a primary feature of our security environment,” the document stated. “It is being accompanied by an unprecedented conventional and non-conventional military build-up in our region, taking place without strategic reassurance or transparency.”

Commenting on the Pacific Skies deployment, the chief of staff of Germany’s air force, the Luftwaffe, said the goal is to increase operational capability, strengthen military cooperation with countries in the Indo-Pacific, and demonstrate air power and dedication to the region.

“By participating in Pacific Skies 24, we as Europeans are showing presence in a part of the world that is of great importance to us all,” Lt. Gen. Ingo Gerhartz said.

Air Commodore Pete Robinson, who commands the Royal Australian Air Force’s Air Combat Group and will lead Pitch Black, told Defense News the events are an opportunity for the country’s NATO partners “to validate true global reach and build interoperability in the region.”

“The quality of training we can provide down here and the air space we have, the weapons ranges we have, and the engagements we have forged across multiple nations is a shining example of how we build interoperability amongst our air forces — and more importantly it’s how we build our partnerships across countries,” Robinson added. “Exercise Pitch Black demonstrates the value of sustaining stability across the region.”

The goals are similar to those of Asian air forces, with a spokesperson for the Japan Air-Self Defense Force saying its participation will contribute to a “free and open” Indo-Pacific region.

“The purpose [of the Japan Air-Self Defense Force’s involvement) is to improve the tactical skills of participating units, enhance interoperability with the RAAF and U.S. forces, and deepen mutual understanding with the participating countries in [a] practical environment,” the spokesperson said.

The company also signed a production contract with the Commonwealth of Australia on the same day, for the first batch of three vessels.

The cutting of the steel, which is to be part of the understructure support for the port propeller shaft brake system, was initiated by South Australian Premier Peter Maklinauskas following the contract signature.

The first ship, HMAS Hunter, is due to be completed in 2032 and is expected to be fully operational by 2034.

“This is a proud moment for us all at BAE Systems Australia, and it comes at a time where the capability of the Hunter has never been so important,” commented the company’s chief executive officer, Ben Hudson. “Hunter will be one of the most technologically-advanced, stealth-capable anti-submarine warfare vessels in the world and its modular mission bay allows it to undertake a wide range of missions.”

The Royal Australian Navy (RAN) had initially planned to buy nine Hunter-class ships, based on the United Kingdom’s Type 26 Global Combat Ship (GCS) design, but an Australian government review into the navy’s surface combat fleet, announced in February, reduced this to just six.

Prior to the release of the review, undertaken by former U.S. Navy Vice Adm. William Hilarides, the Hunter Class Frigate Program (HCFP) had become the subject of criticism from analysts, who pointed out that the 32 Vertical Launch System (VLS) incorporated into the design was an inadequate number in modern naval warfare.

In response to these claims, BAE Systems Australia unveiled a Guided Missile Frigate (GMF) variant of the baseline design in September 2023, which would have increased the number of VLS cells from 32 to 96 at the expense of the high-end anti-submarine equipment, including the towed-array sonar, and the ship’s mission bay.

The government’s surface combatant review made no mention of the GMF type and instead recommended that the number of Hunter vessels should be reduced from nine to six, augmented by 11 new general-purpose frigates to be bought urgently to replace the Navy’s eight Anzac-class vessels.

Testifying before the Defence Senate Estimates Committee in Canberra on June 5, Chief of Navy Vice Adm. Mark Hammond said the decision to acquire the 11 smaller ships, cancel an extensive upgrade for the Anzac-class vessels, and reduce the number of Hunter-class ships is at least in part due to the reduced strategic warning time Australia faces.

“A recognition that flows from that is a requirement to prioritize speed to capability; extending the life of the Anzac -class frigates would just extend the duration of what we have (and that is) the oldest frigate force that we’ve operated,” Hammond said.

“Replacing the eight Anzac-class ships with 11 general-purpose frigates – which will have a small crewing liability, means I don’t necessarily need a bigger frigate workforce until the 2040s, when the Hunters are starting to come online in numbers. In terms of prioritizing speed to capability, additional lethality at sea, additional capability to maintain our economic connectivity with the world through sea lane communications, seabed cablets et cetera … it’s all related.”

Hammond added: “With respect to the future fleet, we’ll go from eight general-purpose (Anzac-class) frigates (which), prior to these decisions had very little offensive strike capability beyond the Harpoon missile, to a fleet of 11 general purpose frigates and nine tier-one warships.” The latter category is planned to consist of six Hunter-class ASW frigates and three Hobart-class air-warfare Destroyers.

Commenting on the reduction in the number of Hunter-class frigates being cut, BAE Systems Australia’s managing director of its Maritime division, Craig Lockhart, said that the company now has clarity around its future.

“Six ships is a lot of work and we’ll be building ships at Osborne for decades to come,” he said.

“We are building up the workforce, establishing a skills and knowledge base and uplifting the local supply chain to enable Australia to build and sustain its own complex warships for generations to come.”

Analysts have lambasted the program, citing the frigate design’s weight growth, scheduling delays and what they view as an inadequate number of vertical launching system cells. Furthermore, in May, Australia’s auditor general slammed the acquisition process in an Australian National Audit Office report, citing serious flaws.

The first phase of the Sea 5000 program involves the production of the ships for the Royal Australian Navy. The government of Prime Minister Anthony Albanese received an independent study of the planned surface fleet on Sept. 29, but its findings will not be made public until the end of the first quarter of 2024.

Former U.S. Navy Vice Adm. William Hilarides conducted the study following recommendations in Australia’s most recent Defence Strategic Review, which called for an enhanced, long-range strike capability, among other things.

But in the meantime, BAE Systems Australia’s managing director for maritime business has pushed back against critics, telling reporters at the Indo Pacific International Maritime Exposition in November that the future frigate recently completed its preliminary design review.

“It still meets all of [Australia’s] key 23 performance criteria [for] speed, range, endurance, seakeeping [and] underwater radiated noise, so I would challenge you to determine why it is still referred to as too heavy and too slow,” Craig Lockhart said. “In fact, it’s still [capable of] 27 knots-plus. And when we get the first ship in the water and get upwards of 31 or 32 knots in the real testing trials, then it will become our model benchmark.”

Design changes

Under the current plan, Australia is seeking to build nine frigates based on the British Type 26 Global Combat Ship design, but featuring an indigenous phased array radar from CEA Technologies and a Saab Australia-made 9LV combat system.

The Australian government chose this modified design, known as the Hunter class, in 2018. BAE Systems Australia is the prime contractor for the Hunter-class frigate program, having beat out Italian firm Fincantieri’s FREMM pitch and Spanish shipbuilder Navantia’s offering of a modified F100 variant.

BAE is currently completing a series of prototyping activities at a purposely designed shipyard in Osborne, South Australia.

The changes to the baseline Type 26 design have resulted in a reduced design margin in terms of weight; the vessel will now displace almost 10,000 tons — an increase over the originally planned 8,800 tons. This is what drove analysts to claim the Hunter-class frigates will not meet the original specifications, as it will end up too big, too heavy and too slow.

In anticipation of future security threats to Australia, as forecast in the Defence Strategic Review, Lockhart revealed at November’s expo that the firm has been working on a modified Hunter design, with some high-end anti-submarine warfare equipment removed and the number of vertical launching system cells increased from 32 to 96. VLS cells are used to launch missiles from ships.

Lockhart said that because production for the frigates will take place in three batches, each including three ships, the latest design — dubbed Hunter Guided Missile Frigate — could be the first vessel in the second batch, which would come with additional options in terms of technological features.

BAE replaced a flexible mission bay in the back half of the ship with a new strike module that houses 64 VLS cells and four quad-pack launchers for the Kongsberg-made Naval Strike Missile. Lockhart said the new strike module is designed for the American-made MK 41 VLS but can accommodate the MK 57 VLS used on the U.S. Navy’s Zumwalt-class destroyers.

“You would need to go to a 13,000-ton ship like the [U.S. Navy’s] Arleigh Burke-[class destroyer] to get the same capability, which is too big and too slow” he said. “Whereas the Hunter Guided Missile Frigate gives us that capability and it retains enough [anti-submarine warfare] capability to do a very good job.”

But Marcus Hellyer, the chief researcher at the consultancy Strategic Analysis Australia, said the removal of the mission bay impacts the ship’s anti-submarine warfare role “by eliminating its ability to operate a second helicopter and potentially its towed array sonar.”

“VLS cells have become a convenient proxy to assess the combat power of warships. By this standard, the Hunter-class frigate’s 32 VLS cells fall short of other warships of a similar size,” Hellyer told Defense News. “The critics’ case is that the Hunter is very poor value for money for such a small number of cells and resultant combat capability.”

“But it’s a more complex issue than simply numbers,” he added. “VLS cells are used primarily for air defense missiles and then land-strike missiles. The primarily role of the Hunter is ASW [anti-submarine warfare], so does it need more than 32 cells? But if the primary role of the Hunter is ASW, why did [the Department of] Defence require significant design changes that are primarily about enhancing its air defense capabilities?”

Getting your money’s worth

For its part, the Australian National Audit Office report, released in May, described the Defence Department’s management of the frigate acquisition process as only “partly effective.”

“Defence’s procurement process and related advisory processes lacked a value for money focus,” the report noted, “and key records, including the rationale for the procurement approach, were not retained.”

“Contract expenditure to date has not been effective in delivering on project milestones, and the project is experiencing an 18-month delay and additional costs due in large part to design immaturity,” it added. “Defence did not conduct an effective limited tender process for the ship design. The value for money of the three competing designs was not assessed by officials.”

Defence Secretary Greg Moriarty responded to the report in November, acknowledging failures in the department’s tender process.

“Planning for procurement fell into a process of disjointed advice to government that did not include deliberate steps to maintain clear coherent goals and a procurement method commensurate with the scale, scope and risk of the procurement,” Moriarty said.

Then on Dec. 5, a secret document made available to lawmakers revealed the program’s selection process focused on high-end capabilities at the expense of value for money, which went against Australia’s Commonwealth Procurement Rules.

“The Department [of Defence] did not fulfil the requirements of the CPRs in relation to achieving value for money,” the document read. “The review team considers that it was highly improbable all members were sufficiently familiar with the procurement process to make an informed opinion as to which tender best supported the achievement of project objectives on value for money.”

And this, said Hellyer, is another area in which program observers find fault.

“To the critics, [the Department of] Defence has asked for a ship that does everything, resulting in something that doesn’t do anything particularly well in light of its very high cost,” he said.

The government’s recent Defence Strategic Review recommended the Army pivot from a “balanced” structure of equally equipped combined arms brigades to a “focused” force able to meet the changing threat in the Asia-Pacific region. The document places an emphasis on long-range strike and littoral maneuver capabilities while retaining the combined arms philosophy.

“The current Australian Defence Force (ADF) force structure is based on a ‘balanced’ force model that reflects a bygone era. It does not adequately address our new strategic environment,” the report stated. “The ADF needs a much more focused force that can respond to the risks we face. It should be informed by net assessment and able to effect a strategy of denial.”

This refocus includes an enhanced long-range strike capability for multiple domains of warfare; a fully enabled and integrated amphibious combined arms land system; and a mobile, joint expeditionary theater logistics system with the ability to supply a force beyond Australia’s shores for an extended period of time.

“This conceptual approach to force structure planning will lead to a force designed to address the nation’s most significant military risks,” the report read. “The capabilities required to address identified threats will also provide latent capability to deal with lower-level contingencies and crises.”

Change of plans

The Defence Strategic Review specifically recommended the accelerated acquisition of additional M142 High Mobility Artillery Rocket Systems as well as local manufacturing of weapons to ensure stocks are maintained.

For the Australian Army, this has meant a significant reduction in the number of AS21 Redback infantry fighting vehicles it had planned to acquire.

The service originally sought 450 Redback vehicles from Hanwha Defense Australia, a local branch of the South Korean company Hanwha, under the government’s multibillion-dollar Land 400 Phase 3 program, but the defense review recommended a reduction to 129 units to reflect the new force structure concept.

Australian Defence Minister Richard Marles announced the accelerated purchase of HIMARS on Aug. 19, highlighting the change in focus. The country is already investing AU$1.6 billion (U.S. $1 billion) in a second tranche of HIMARS launchers and weapons, which takes the number on order to 42 units.

An earlier tranche announced in January committed Australia to 20 HIMARS weapons, with deliveries beginning in the first quarter of 2025 and wrapping up by the end of 2026.

The Defence Strategic Review also axed a planned second regiment of Hanwha Defense Australia-made AS9 Huntsman 155mm self-propelled howitzers as well as AS10 armored ammunition resupply vehicles. That acquisition was part of Phase 2 of the government’s Land 8116 program focused on protected mobile fires.

“We’re currently working through how we will rebalance the Army’s contribution to the integrated force. That system [AS9 and AS10] will still deliver a world-class capability; there will just be less of it,” said Lt. Gen. Simon Stuart, chief of the Army. “I’m focused on the implementation of the direction that we’ve been given, and we’ll continue to deliver the capability that is required by the integrated force within the resource envelope that we have.”

Under Phase 1 of the Land 8116 project, the Army is still set to receive 30 AS9 howitzers and 10 AS10 ammo resupply vehicles beginning in 2025.

Land 400 Phase 3 is a multiyear program that assessed the AS21 and the Germany company Rheinmetall’s KF41 Lynx, with the former declared the contract winner on July 27.

“We will be beginning delivery of these vehicles in early 2027, with the final vehicles to be delivered in late 2028,” Minister for Defence Industry Pat Conroy said. “This is bringing it forward by a number of years.”

That timeline coincides with “the delivery of more landing craft and a very significant investment in long-range strike, both the HIMARS rocket system and land-based maritime strike. So that the Australian Army’s longest-range weapon will go from roughly 40 kilometers to 300 kilometers, then over 500 kilometers,” Conroy added. (That’s about 25 miles to 186 miles, then more than 311 miles.)

Conroy was referring to the initial acquisition of Guided Multiple Launch Rocket Systems, Army Tactical Missile Systems and, eventually, the U.S. Army’s Precision Strike Missile for HIMARS. Australia jointed the U.S. Army’s Precision Strike Missile development program in August 2021.

The Australian Army’s longest-range weapon is the M777 towed howitzer, Gen. Angus Campbell, chief of the Defence Force, said in May during a Senate estimates hearing, during which lawmakers scrutinize how the government is spending taxpayers’ money.

Coastal defense

Australia is also looking to acquire a long-range maritime strike and coastal artillery system under Project Land 4100 Phase 2.

In response, Kongsberg Defence Australia and Thales Australia have partnered to offer a system based on the utility variant of the Bushmaster protected mobility vehicle, together with Kongsberg’s Naval Strike Missile.

The Australian Army has fielded the Bushmaster for several years now, and the Royal Australian Navy selected the Naval Strike Missile as its deck-launched Harpoon replacement.

The Kongsberg-Thales pitch, dubbed StrikeMaster, is similar to the American Navy/Marine Corps Expeditionary Ship Interdiction System, which uses the Naval Strike Missile with an unmanned variant of the Joint Light Tactical Vehicle dubbed Rogue Fires. However, the StrikeMaster will be a crewed system.

Kongsberg is a Norwegian company, and Thales is based in France.

For its part, the American firm Lockheed Martin is proposing a variant of the M142 HIMARS launcher, integrated with a ground-launched version of the AGM-158C long-range, anti-ship missile. The Australian Army already purchased the former, and the Royal Australian Air Force has ordered the air-launched version of the latter.

Domestic focus

However, underpinning these long-range strike enhancements is a requirement to establish a sovereign supply of weapons — an acknowledgment that global supply chains are inevitably disrupted during a conflict.

In response, the government has committed AU$2.5 billion over the course of four years for the Defence Department’s Guided Weapons and Explosive Ordnance Enterprise, or GWEO.

“The war in Ukraine has demonstrated the importance of having not just war stocks, but a domestic missile manufacturing industry,” Marles said April 30

GWEO will initially focus on the domestic manufacture of 155mm ammunition, but is also looking to manufacture guided missiles in Australia under the Guided Weapons Production Capability plan.

Speaking at the Senate estimate hearing in May, the head of GWEO, Air Marshal Leon Phillips, said an Australian team recently visited the United States to meet with missile manufacturers and federal lawmakers.

“GMLRS [the Guided Multiple Launch Rocket System] is a credible option that we are looking to accelerate, and I expect we’ll return to [the Australian] government before quarter two of 2024 with options to make a start on that, to meet what we believe is a credible timeline for a level of missile production in this country in 2025,” Phillips said.

When asked by senators if plans were set for eventually manufacturing the U.S. Army’s Precision Strike Missile, Phillips replied: “Not at this stage. I think GMLRS is a logical start point, and then we might work our way up in terms of our industrial base, our certification, our competencies, and our releasability and ITAR issues with the U.S. government.”

ITAR, or International Traffic in Arms Regulations, is a U.S. government regime that controls the export of defense equipment and other sensitive technology.

Landing craft

The Defence Strategic Review also recommends the government accelerate its multiphase landing craft program Land 8710.

Phase 1 of the program is in an open-tender stage, which should lead to the purchase of medium littoral maneuver vessels to replace the Army’s LCM-8 landing craft, as well as the acquisition of an amphibious vehicle to replace the Vietnam-era LARC vehicles.

Phase 2 is for the acquisition of heavy landing craft to replace the Balikpapan-class vessels retired more than a decade ago.

Phase 3 will seek a fast assault craft.

“We are investing in the capabilities our Defence Force needs to hold our adversaries at risk further from our shores, and keep Australians safe in the complex and uncertain world in which we live today,” Marles said Aug. 21.

The 110-page report calls for fundamental changes to the structure of the Australian Defence Force to counter modern and emerging threats, but does so at the expense of capability acquisition and base infrastructure projects. While some efforts will simply undergo a delay or “re-scoping,” others will get canceled outright.

The review was conducted over several months by Angus Houston, a former Australian Defence Force chief, and Stephen Smith, a former defense minister. The effort was “the most ambitious review of Defence’s posture and structure since the Second World War,” according to the document.

“A large-scale conventional and non-conventional military build-up without strategic reassurance is contributing to the most challenging circumstances in our region for decades,” Defence Minister Richard Marles stated in his introduction to the report. “Combined with rising tensions and reduced warning time for conflict, the risks of military escalation or miscalculation are rising.”

The report also said the United States is no longer the unipolar leader in the region amid a return to strategic competition among major powers.

“As a consequence, for the first time in 80 years, we must go back to fundamentals, to take a first-principles approach as to how we manage and seek to avoid the highest level of strategic risk we now face as a nation: the prospect of major conflict in the region that directly threatens our national interest,” the report read. “Strategically, we may have already entered a decisive period for the Indo-Pacific. As a result, our ability to address the reduced strategic warning time identified in the 2020 Defence Strategic Update has come into sharper relief.”

That 2020 document acknowledged Australia’s traditionally held view that the nation would have a decade of warning time to prepare itself for conflict no longer applied. The latest Defence Strategic Review takes this one step further, calling for a three-stage strategy beginning with a two-year period between now and 2025 to address “matters which must be prioritised and addressed urgently.” A second period would follow between 2026 and 2030, and then a third “beyond 2031.”

The Defence Strategic Review also recommended the government commission a new version every two years in place of the sporadically released defense whitepapers of the past.

Furthermore, it calls for a change in the military’s Defence of Australia doctrine — adhered to over the past 50 years — to one which will see a more integrated force able to respond to rapidly changing risks.

“The current Australian Defence Force (ADF) force structure is based on a ‘balanced force’ model that reflects a bygone era. It does not adequately address our new strategic environment,” the review stated. “The ADF needs a much more focused force that can respond to the risks we face. It should be informed by net assessment and able to effect a strategy of denial.”

For the first time, the review addresses the need to harden Australia’s air bases and secure fuel supplies against attack from Australia’s north. In the past, these were couched in general terms; there are currently no hardened defense facilities.

Capability needs

The review calls for the military to apply several “critical capabilities,” including:

• Maritime drones that can perform intelligence, surveillance and reconnaissance missions on the surface and underwater.
• An enhanced integrated targeting capability.
• Enhanced long-range precision strike weapons for all domains of warfare.
• An amphibious-capable combined-arms land system.
• All-domain maritime capabilities for sea-denial operations.
• A networked expeditionary air operations capability.
• An enhanced integrated air and missile defense system.
• A joint and expeditionary theater-logistics system.
• A theater command-and-control network.
• A network of northern bases for logistics support, denial and deterrence.

The Royal Australian Navy’s plan to acquire a nuclear-powered attack submarine under the AUKUS framework is also a linchpin of the new Defence Strategic Review, as is the government’s continuous naval shipbuilding strategy. The AUKUS deal between Australia, the United Kingdom and the United States is meant to improve information and technology sharing efforts between the allies.

“The acquisition of conventionally-armed, nuclear-powered submarines will transform Navy’s capability,” the report read. “Nuclear-powered submarines are key assets both in effecting a strategy of denial and in the provision of anti-submarine warfare and long-range strike options.”

The government should expand efforts to acquire long-range precision strike weapons, including the recently announced plan to buy the American-made High Mobility Artillery Rocket System, and support plans to co-develop and purchase the American-made Precision Strike Missile, according to the review.

The military should also speed up the Army’s littoral combat maneuver program, the report said.

“Defence must rapidly accelerate and expand Army’s littoral manoeuvre vessels (medium and heavy landing craft) and long-range fires (land-based maritime strike) programs. This will require Army to re-posture key capabilities,” the document stated. “It is essential to immediately accelerate the acquisition of Land 8710 Phases 1 & 2 — Army Littoral Manoeuvre Vessels (Landing Craft Medium and Heavy) and expand the scope of this capability. Without this, only limited numbers of major land capabilities can be projected offshore.”

Change of plans

Meanwhile, cuts are to be made to fund the military’s future model. Key among these is confirmation that Army’s Land 400 Phase 3 program for a tracked infantry fighting vehicle — with an estimated value of AU$25 billion (U.S. $17 billion) — will be slashed from 450 vehicles to 129. That new quantity could equip a single mechanized battalion for littoral maneuver.

The second phase of the Army’s Land 8116 protected mobile fires project — an effort to acquire 30 more AS9 self-propelled howitzers and K10 ammunition resupply vehicles made by South Korea’s Hanwha — would also get scrapped under the review’s plan.

Furthermore, the review calls for an independent analysis of the Royal Australian Navy’s surface combatants by the end of the third quarter of this year. This could impact the service’s plans to build nine Hunter-class frigates and the generally unarmed Arafura-class offshore patrol vessels.

The report also quashes a suggestion that the Royal Australian Air Force acquire a small number of Northrop Grumman-made B-21 Raider strategic bombers.

“The Review has undertaken detailed discussions in Australia and the United States in relation to the B-21 Raider as a potential capability option for Australia. In light of our strategic circumstances and the approach to Defence strategy and capability development outlined in this Review, we do not consider the B-21 to be a suitable option for consideration for acquisition,” it stated.

The Defence Strategic Review also calls for a reform of the Capability Acquisition and Sustainment Group’s acquisition policy, labeling it as unsuitable for Australia’s current strategic circumstances. The group falls under the purview of the Defence Department.

Instead, in what appears to be a major blow for the Australian defense industry, the document calls for the rapid acquisition of more capabilities via a “sole source or off-the-shelf procurement” mechanism.

While applauding the forward-looking aspect of the review, Tim Dore, who serves as acting CEO of the defense industry trade association Defence Teaming Centre, warned of problems ahead for local business.

“We understand why the significant overhaul was needed. We are in a considerably different geopolitical environment than in 2020, and the DTC appreciates the government requesting the review early on in their tenure,” Dore said.

“However, there are numerous businesses who have lost out on work and who have lost hundreds of thousands of dollars in investments they had made to upskill their workforce and equipment based on Defence’s previous requirements, only to see the Government’s direction once again change. Neither the taxpayer nor the warfighter benefits from this indecision,” Dore added.

The Australian government has agreed — at least in principle — to all of the report’s recommendations. Further details regarding defense funding are expected to come in the federal budget on May 9.

The incident comes a month after Australia’s second-largest wireless telecommunications carrier, Optus, became aware that personal data of more than one-third of the country’s population of 26 million had been stolen.

But these hacks represent just a small portion of the cyberattacks that target Australia. “Throughout recent years, Australia has been targeted by a range of actors conducting cyber operations that pose a significant threat to our security,” Rachel Noble, who heads the Australian Signals Directorate, wrote in a document outlining Redspice, the government’s plan to bolster its cyber capabilities.

Redspice — which stands for Resilience, Effects, Defence, Space, Intelligence, Cyber, Enablers — is set to receive AU$9.9 billion (U.S. $6.3 billion) over the next decade, the government of then-Prime Minister Scott Morrison announced in March.

The funding represents the largest-ever investment in Australia’s national cyber and intelligence capabilities.

Where will the money come from?

Formed 75 years ago, the Australian Signals Directorate, or ASD, is part of the Defence Department and is entrusted to provide foreign signals intelligence, cybersecurity advice and offensive cyber operations to meet the needs of the department and the military.

The funding for Redspice is meant to triple Australia’s current offensive cyber capability, double its persistent digital hunting activities, develop advanced artificial intelligence and machine-learning capabilities, and quadruple the global footprint of ASD. It’s also meant to bring on 1,900 new employees and open offices in Brisbane, Perth and Melbourne.

“This investment in ASD recognizes the deteriorating strategic circumstances in our region, characterized by rapid military expansion, growing coercive behavior and increased cyberattacks. It acknowledges the nature of conflict has changed, with cyberattacks now commonly preceding other forms of military intervention — most recently demonstrated by offensive cyber activity against Ukraine,” then-Defence Minister Peter Dutton said in March.

“Redspice ensures Australia keeps pace with the rapid growth of cyber capabilities of potential adversaries. It provides new intelligence capabilities, new cyber defence capabilities to protect our most critical systems, and is a real increase in the potency to strike back in cyberspace,” he added.

While the exact capabilities and activities of ASD are a closely guarded secret, Noble provided some details when she testified in April before a Senate panel on government spending.

“Our job in ASD is as an operational agency with particular regard to cybersecurity — so providing technical advice and assistance to all Australians,” Noble said. “That’s a very different role to the Office of National Intelligence, which is to essentially provide strategic intelligence assessment[s].”

The director general added that the “vast amount” of increased capability to be delivered will come from the increased workforce and the establishment of the new offices around the country.

Although the funding stretches over 10 years, Noble said, the workforce would triple by the 2026-2027 time frame — growing by 400 personnel in 2023-2024; 600 in 2024-2035; 500 in 2025-2026; and about 200 in 2026-2027.

According to the first budget released by the current government on Oct. 25, spending in the 2021-2022 financial year was AU$1.17 billion. Redspice will see funding for 2022-2023 rise to AU$1.7 billion, and then AU$2.32 billion for 2023-2024.

With Redspice funding at AU$9.9 billion over 10 years, AU$4.2 billion of that has to be found in the four-year forward estimates period. (Australia’s forward estimates include the level of expenses proposed by the government for future years, based on economic, demographic and forecasting assumptions.)

Of the AU$4.2 billion, only AU$588.7 million will be new money, requiring AU$3.6 billion to come from the Defence Department’s Integrated Investment Program, a fully funded plan meant to set the course for defense acquisition over future years. In other words, if a project is listed as part of the program, funding is available for that project over the specified time frame. It is unusual — but not unheard of — for a project to be removed from the IIP.

It’s unclear where the remainder of the funding total will come from.

So far, this has resulted in the cancelation of the Royal Australian Air Force’s AU$1.3 billion MQ-9B SkyGuardian armed drone program. The direct link was confirmed before a Senate hearing by Matt Yannopoulous, in the acting role of defense secretary. Deliveries were expected to begin in the middle of this decade under Project Air 7003 Phase 1.

Australia chose to ax the SkyGuardian procurement effort because it had yet to reach Gate 2 approval, and was therefore easier to cancel. However, the new defense minister, Richard Marles, has promised to study the previous government’s decision as part of a Defence Strategic Review to be completed in the first half of 2023.

Another major defense acquisition effort yet to gain Gate 2 approval is the Army’s Land 400 Phase 3 Infantry Fighting Vehicle program, worth AU$18-$27 billion.

Up to 450 new IFVs — either Hanwha Defense’s AS21 Redback or Rheinmetall’s Lynx KF41 — are to replace the Army’s Vietnam-era M113 armored personnel carriers. However, both bidders have been told they must submit their respective bids based on an order of 300 vehicles, with options for three tranches of 50 vehicles each.

However, Defence Department officials have denied that vehicle quantity decrease is due to the need to fund Redspice, saying a government decision on Land 400 is yet to be made.

Still, a shortfall in funding remains in the forward estimates period. At least some of this funding shortfall will come from three existing ASD projects, which will now be subsumed under Redspice.

“None of [the three ASD projects] have been canceled. There was already funding in the IIP, and I’ll speak about them broadly because two of them in particular are highly classified,” Noble said at the Senate hearing. “One is for building our capability in signals intelligence mission systems; another is for offensive cyber; and one is for components of the CESAR [Cyber Enhanced Situational Awareness and Response] program.”

“The programs were funded in the IIP, but have now moved forward in time [and] are, in some respects, being subsumed and added [to Redspice]. Let’s take offensive cyber for example: We might have been on a pathway to deliver an offensive cyber capability, and now what Redspice is enabling is that, while we are on that pathway, we would do it sooner and have more money and capacity to do three times as much as what we were already,” she added.

No longer ‘business as usual’

Fergus Hanson, director of the International Cyber Policy Centre at the Australian Strategic Policy Institute, said Redspice is critical because of the massive increase in the Australian population’s digital footprint over the last decade.

“This has created major opportunities for both offense and defense, and there’s just no way a ‘business as usual’ approach could keep pace with the rate of change that we have in terms of digital uptake,” he told Defense News.

Hanson pointed to Australia’s membership in the intelligence-sharing alliance Five Eyes as also driving the financial investment.

“The urgency is partly geopolitical and partly just the pace of change in the digital world,” he said. “I don’t think there’s any world in which [Australia] can get close to the U.S. in cyber capability, but I think to remain a meaningful contributor in our areas of specialization is the ambition.”

He also cited the country’s deteriorating relationship with regional neighbor China, which has implemented trade sanctions against Australia, and the strategic defense agreement AUKUS, which will see Australia, the United Kingdom and the United States work together on nuclear-powered submarine technology.

“We used to believe that we didn’t have to choose between our largest trading partner and our most important ally, but with AUKUS we well and truly chose,” Hanson said. “China took a strategy of trying to push us to our limit and seeing if they could break us, and they ended up pushing us from one side to the other, so that to me adds up to Redspice.”

The Associated Press contributed to this report.

The move follows an earlier decision by the government of Prime Minister Scott Morrison to replace the Australian Army’s European Tiger Armed Reconnaissance Helicopters with U.S.-made Boeing AH-64E Apache Guardian attack helicopters.

The MRH 90 is presently operated by the Australian Army in battlefield mobility and counter terrorism support roles and by the Royal Australian Navy in the embarked logistics helicopter role. The first of 47 MRH 90s entered service in December 2007 and was intended to replace a number of helicopter types then in service, including the Sikorsky S-70A-9 Black Hawk, Bell UH-1H Iroquois and Westland Sea King Mk.50A/B.

Ironically, the Australian Army’s older Black Hawks are only being retired this week, following delays to modifications required for the MRH 90 to meet the needs of Special Forces.

The Taipan had been expected to remain in service until at least 2037, but the fleet has suffered from poor availability and high ownership costs. It has been on the government’s projects of concern watchlist since November 2011.

Dutton said that, despite remediation efforts by Defence and industry, the MRH 90 fleet had failed to meet contracted availability and cost of ownership ahead of its planned withdrawal date.

“The performance of the MRH 90 Taipan has been an ongoing and well-documented concern for Defence and there has been a great effort at great expense to try to remediate the issues,” he said in a statement. “It is critically important that there is a safe, reliable and capable helicopter available for our service men and women into the future, with reasonable and predictable operating costs.”

Dutton did not detail a precise timeline or cost for the UH-60M acquisition, but said Australian taxpayers will save about $2.5 billion (U.S. $1.8 billion) through 2037.

“The Black Hawk is so much cheaper on a per-hour basis to run than the existing Taipan. The Taipan is unreliable, there’s a lot of money that’s spent on maintenance and a lot of downtime of our pilots and air crews who should be up training and they should be flying these helicopters, and at the moment, in many cases, they just can’t,” he said. “It’s why we need this capability sooner than later, and I’m hoping over the next couple of years we will have the new Black Hawk in service and that will be a great outcome for the ADF.”

In October, the U.S. Defense Security Cooperation Agency advised that the State Department has approved the potential sale of an additional 12 Sikorsky MH-60R Seahawks (without anti-submarine warfare equipment) to Australia. The Australian Department of Defence later confirmed the helicopters are being considered to replace the MRH 90 in the maritime support role under Project Sea 9100.

While a specific type of nuclear submarine is yet to be determined, likely candidates would appear to be either Britain’s Astute-class attack submarine or the U.S. Virginia-class vessel. Construction is slated to take place locally at Osborne in South Australia.

Australian Prime Minister Scott Morrison, U.S. President Joe Biden and U.K. Prime Minister Boris Johnson jointly announced the formation of a new tripartite alliance known as AUKUS on Thursday (local time), under which the first initiative will to build at least eight nuclear-powered submarines for the Royal Australian Navy.

Morrison also announced that a previous $90 billion (US$65.88 billion) contract Australia holds with France’s Naval Group for the construction of 12 conventional submarines, which were to have been known as the Attack class in Royal Australian Navy’s service, has been terminated.

A decision on the final number of new submarines is expected to be made by Canberra during the upcoming analysis phase.

“We intend to build these submarines in Adelaide, Australia in close cooperation with the United Kingdom and the United States,” Morrison said, “But let me be clear: Australia is not seeking to acquire nuclear weapons or establish a civil nuclear capability and we will continue of meet all our nuclear non-proliferation obligations.”

The change to a nuclear-powered boat in lieu of the conventional submarine Australia was designing in conjunction with Naval Group and Lockheed Martin Australia (for the Combat System) was made as a result of the meeting between the three leaders at the G7 Summit held in the UK in June, during which the AUKUS alliance concept was formulated.

The decision is understood to have been brought about by the deteriorating security environment and rapidly evolving military technologies in the Indo-Pacific region, and it is enabled by new technology which allows Australia to build nuclear-powered boats that do not require a supporting civil nuclear industry.

Australia has spent around AU$2.4 billion (U.S. $1.76 billion) on the Attack-class design so far, but the additional cost of terminating the current contract is yet to be negotiated. The projected cost of the new future nuclear submarine has also yet to be determined or announced.

In a statement following Thursday’s announcement, Naval Group described the Australian decision a “major” disappointment. “Naval Group was offering Australia a regionally superior conventional submarine with exceptional performances. A sovereign submarine capability making unrivaled commitments in terms of technology transfer, jobs and local content,” the company said.

“For five years, Naval Group teams, both in France and in Australia, as well as our partners, have given their best and Naval Group has delivered on all its commitments.”

The company said an analysis of the consequences of the decision will be conducted with the Commonwealth of Australia in the coming days.

The deputy secretary for the national naval shipbuilding program, Tony Dalton, told Defense News that “the decision to not proceed with the Attack Class Submarine Program was driven by a consideration of the strategic circumstances and the impact this has on Australia’s submarine capability requirements.”

“It was not related to the performance of Naval Group or Lockheed Martin,” Dalton added. “Over the coming months, the Department will conduct negotiations with both Naval Group Australia and Lockheed Martin Australia to reach a fair and equitable agreement to wind up the Attack class submarine program. “

The change of heart is likely to mean the Royal Australian Navy’s Collins-class submarines will now remain in service, in diminishing numbers, until the late 2040s. The six Collins boats will cycle through a further Full Cycle Docking (FSD) activity and Life of Type Extension (LOTE) program to ensure their effectiveness until withdrawal. The scope of the LOTE upgrade has not been made public, but an announcement by South Australian Premier Steven Marshal Thursday revealed the work will also be done at Osborne.

Defence Minister Peter Dutton and Minister for Defence Industry Melissa Price made the joint announcement on Aug. 5, marking the official beginning of the second phase of the Competitive Evaluation Process (CEPS2) to select a strategic partner to oversee design, development and delivery of the JBAMS System.

“Defence found the down-selected companies demonstrated the best understanding of its capability requirements, as well as a strong commitment to developing Australian industry capability,” Price said in a statement. “I look forward to seeing the advanced technical solutions and prototypes that will be developed as these companies refine their final offering for the Joint Air Battle Management System.”

The two successful companies, together with Boeing Defence Australia and Raytheon Australia, were selected under an initial stage of the CEPS program in 2016. According to the ministers, Boeing and Raytheon will continue to be involved in the development of the JBAMs and support the Australian Defence Force’s future Integrated Missile and Air Defence (IAMD) capability.

The JBAMS system will form the core architecture for the IAMD capability and will provide enhanced situational awareness and defense against increasingly sophisticated threats.

A further program, Air 6502 Phase 1 (Medium Range Ground-Based Air Defence Capability), will provide command-and-control systems, radars and missile launchers.

Both projects will be closely integrated with the Australian Army’s Land 19 Phase 7B (Short Range Ground Based Air Defence) program, for which Raytheon Australia was selected as prime contractor in March 2019.

“Today’s announcement marks the next step of Air 6500/1 to work in partnership with the Australian Defence Force and industry partners to support the Royal Australian Air Force’s vision to transform into a next-generation force, through delivering a sovereign, highly-advanced JABMs system to protect Australia’s security,” said Lockheed Martin Australia and New Zealand chief executive Joe North.

“We look forward to collaborating with Australian industry and the RAAF to progress the solution as part of CEPS2.”

Northrop Grumman Asia Pacific managing director Christine Zeitz also highlighted the importance of growing an Australian Industrial Capability (AIC) in the development of a sovereign IAMD system.

“We will employ a highly collaborative ‘JABMS Enterprise’ approach that will bring together capabilities developed by Australia’s defence industry, including active and passive sensors, intelligent agents, data fusion and processing, through a solution architecture that is flexible, open, modular, secure and adaptable by design,” Zeitz said.

The Australian government will announce the successful strategic partner for the JABMS system in late 2023.