View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. News
May 22, 2020updated 21 May 2021 11:44am

COVID-19 to disrupt NATO’s modernisation efforts: Poll

The future of NATO’s modernisation plans to upgrade its fleet remain uncertain at a time when aerospace and defence contractors are being affected by the global and local disruptions caused by COVID-19.

The future of NATO’s modernisation plans to upgrade its fleet remain uncertain at a time when aerospace and defence contractors are being affected by the global and local disruptions caused by COVID-19.

Free Report
img

Latest Updates on the Ukraine/Russia Crisis

Whilst at its core a humanitarian crisis, the Russian invasion of Ukraine risks adding materially to existing global economic and supply challenges. We are likely heading into a period in which geopolitics will become a regular part of boardroom discussions. Recent developments have seen Russian companies make significant progress around the world to supply countries with equipment in various Aerospace, Defense & Security sectors. This means that countries dependent on Russian arms for their security calculations should review all purchases and clauses regarding their programs and payments. Download GlobalData’s 5th Ukraine Conflict Executive Briefing to learn more. This report is part of a continued series that is renewed monthly with the latest data and analysis, as the conflict develops and has wider implications across sectors. Access the latest macro-economic forecasts, charts with the latest data, and our updated sanctions tracker, as well as our updated sector scorecards to reflect the current views on the impact of the crisis at a company level.
by GD50 ADS
Enter your details here to receive your free Report.

Contractors have been forced to shut down manufacturing plants due to lockdown measures, while the grounding of flights has led to uncertainty regarding future orders.

Verdict has conducted a poll to assess whether NATO’s modernisation plans will be disrupted due to the COVID-19 outbreak.

Analysis of the results shows that NATO’s modernisation plans may be disrupted due to the pandemic, with a majority 44% of the respondents having voted for the same, while 25% felt that it will not be affected and 31% felt that it will be affected partially.

The percentage of respondents who anticipate at least a partial impact on the modernisation plans stands at 75%.

NATO Modernisation-COVID-19

The analysis is based on 946 responses received between 04 May and 18 May.

Impact of COVID-19 on NATO’s modernisation plans

NATO is currently undertaking several programmes such as the $1bn E-3A Airborne Warning & Control System (AWACS) aircraft modernisation and procurement of the Allied Ground Surveillance (AGS) Global Hawk.

The AWACS was awarded to Boeing, to keep the aircraft in service until 2035. Boeing, however, has been impacted by the COVID-19 lockdown measures. The company has been forced close manufacturing plants possibly delaying the project.

The AGS aircraft are being procured by 15 allies of the NATO, which will maintain it on behalf of the allies.

The first two AGS aircraft were delivered in 2019 by Northrop Grumman, which has warned of potential impact of the COVID-19 outbreak including an increase in borrowing costs and disruptions to customers and operations.

The company was able to weather some of the impacts of the pandemic as sales increased across all business units, according to GlobalData. Operating income, however, has declined, indicating a supply chain disruption which may impact the company’s deliveries including the AGS aircraft.

NATO’s other procurement programmes such as the Multinational Multi-Role Tanker and Transport Fleet (MMF) has remained unaffected as the first two aircraft are scheduled to arrive in June.

Although NATO Secretary General Jens Stoltenberg has urged allies to keep up defence expenditure, experts such as Robert Baines, president and chief executive officer of the NATO Association of Canada, noted that the ability to justify large procurement projects will become harder due to the economic turmoil caused by the pandemic, as quoted by CBC News.

Related Companies

Free Report
img

Latest Updates on the Ukraine/Russia Crisis

Whilst at its core a humanitarian crisis, the Russian invasion of Ukraine risks adding materially to existing global economic and supply challenges. We are likely heading into a period in which geopolitics will become a regular part of boardroom discussions. Recent developments have seen Russian companies make significant progress around the world to supply countries with equipment in various Aerospace, Defense & Security sectors. This means that countries dependent on Russian arms for their security calculations should review all purchases and clauses regarding their programs and payments. Download GlobalData’s 5th Ukraine Conflict Executive Briefing to learn more. This report is part of a continued series that is renewed monthly with the latest data and analysis, as the conflict develops and has wider implications across sectors. Access the latest macro-economic forecasts, charts with the latest data, and our updated sanctions tracker, as well as our updated sector scorecards to reflect the current views on the impact of the crisis at a company level.
by GD50 ADS
Enter your details here to receive your free Report.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The defence industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Airforce Technology