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F-16 Peace Xenia - Hellenic Air Force

The Hellenic Air Force (HAF) requirement for a fighter aircraft was eventually narrowed down to two candidates, the Dassault-Breguet Mirage 2000 and the General Dynamics F-16. Greece eventually decided to split the purchase and ordered 40 F-16s and 40 Mirage 2000s.

On November 11, 1984, the Government of Greece (GOG) announced its decision to purchase forty F-l6 fighter aircraft to replace the country's F-5A Freedom Fighter. Including spares and support services, the cost wss $940 million. Accompanying the purchase would be a 100 percent offsets package, to be fulfilled by GD and its engine and avionics partners, General Electric (GE) and Westinghouse Electric corporations. The package would consist of a combination of direct and indirect offsets, including opportunities for coproduction and countertrade.

In the two years between the decision to buy F-16s and the January 1987 finalization of the purchase agreement between the GOG and the F-16 partners, the nature of this offset arrangement changed considerably. The final sales contract still included anominal 100 percent offset agreement, with some co-production opportunities. But in place of the traditional indirect provisions, and in place of many direct offset demands GD felt it would not beable to fulfill, the GOG and the F-16 partners established a venture capital company that was unique in the world of offsets.

In the case of the GOG's purchase of F-16s, the offset requirements alone comprised 37 pages of the RFP, were extensive and detailed. Furthermore, they were even less favorable from the aircraft seller's perspective in that credits for the different types of implementations were considerably less than those described in policy. An example of the F-16 RFP's detail is the section addressing the distribution. Although the RFP only required that a minimum of 30 percent of the offsets be in groups one and two (F-16 or other aircraft items), it specified that this effort would focus on establishment of a Greek infrastructure to cost effectively support the Hellenic Air Force's weapon systems. This would be achieved through coproduction and subcontracting programs focusing on the final assembly and testing of the F-16 and on depot level maintenance.

Moreover, the seller would be required offer Greek industry every opportunity to enhance its manufacturing, R&D, and depot level capabilities through production and developmental work in aeronautical activities in which the seller or other parties are engaged." Language regarding the distribution of implementations in group three (other civilian, non-aircraft goods) was even more specific. The RFP required the seller's best efforts to achieve a distribution of: 50 percent purchases, 15 percent direct investment, 15 percent enhancement of Greek participation in construction projects and studies in third countries, 10 percent technology transfer, and 10 percent tourism.

GD judged these offset requirements to be unacceptable. Furthermore, GD felt that the structural limitations of the Greek economy would effectively prohibit the realization of many of the GOG's desires for industrial and high technology offsets. Thus, GD and the GOG were never able to come to terms on an offset program under the framework of the RFP. Instead, GD and the GOG agreed on a two-part offset package. The first part consists of afairly standard coproduction program under which the GOG would produce various components of the F-16 and its engines. The second part was concernedentirely with the establishment of a venture capital company, singularly dedicated to the identification, development and implementation of profitable business transactions in Greece.

Under the first part of the offset program, the GOG's state-owned aerospace corporation, Hellenic Aerospace Industries (HAI), produced several components and subassemblies for a portion of GD's existing F-16 orders. Additionally, HAI became a potential second source for many of these items on any future F-16 contracts. GD estimated the total amount of the coproduction program at $240 million.

Coproduction is a primary concern of the GOG in any major military purchase. Through coproduction, the GOG hoped to obtain technology for industrial modernization, particularly forthe modernization of its aerospace industry. For the F-16 purchase, as in most of the GOG's aircraft purchases, this implied the involvement of HAI, as it was Greece's only significant aerospace company.

Under the coproduction agreement, HAI coproduced several components of the F-16, including 230 aft fuselage sections and 485 air inlets compatible with the F110-GE-100 engine. Additionally, HAI produced four components of the engines and developed a depot capability and test cell for the repair, maintenance, and testing of the engines. As many as eighty-one pieces of the necessary support equipment for theengine work were produced in Greece. These provisions represented a scaling down of the initial coproduction program. That would have involved production of eight engine components, as well as various electronics and avionicscomponents supplied by Westinghouse. However, the investment cost for these items made them too economically unfeasible, even considering the employment, technology, and domestic political benefits involved.

The formal agreement was signed in January 1987. The first group of F-16C/Ds for Greece, acquired under the Peace Xenia I Foreign Military Sales program, were delivered between November 1988 and October 1989. They were Block 30 aircraft, powered by the General Electric F110-GE-100 turbofan engine. The first F-16D for the Hellenic Air Force was presented in November 1988. The first F-16C was delivered later that same month. They were Block 30 aircraft, powered by the General Electric F110-GE-100 turbofan engine. The first F-16D for the Hellenic Air Force was presented in November 1988. The first F-16C was delivered later that same month. In April 1993, Greece placed an order for 40 additional F-16 Block 50 fighters under the Peace Xenia II program. The aircraft are powered by the General Electric F110-GE-129 engine.

Under the first part of the offset program, the GOG's state-owned aerospace corporation, Hellenic Aerospace Industries (HAI), would produce several components and subassemblies for a portion of GD’s existing F-l6 orders. Additionally, HAI would become a potential second source for many of these items on any future F-l6 contracts. GD estimated the total amount of the coproduction program at $240 million.

Co-production was a primary concern of the GOG in any major military purchase. Through coproduction, the GOG hoped to obtain technology for industrial modernization, particularly for the modernization of its aerospace industry. For the F-16 purchase, as in most of the GOG's aircraft purchases, this implied the involvement of HAI, as it is Greece's only significant aerospace company.

Peace Xenia was unique in that the F-16s were ordered from General Dynamics directly as a commercial buy rather than through the U.S Air Force. The program value was $659 million. Deliveries began in October 1988, and completed in January 1990. In September 1990, the HAF requested post-production follow-on support from the US Government under FMS. The $33.7 million follow-on support program began in January 1991, and went through 31 December 1993.

In April 1993, Greece placed an order for 40 additional F-16 Block 50 fighters under the Peace Xenia II program. The aircraft are powered by the General Electric F110-GE-129 engine. The first two F-16 Block 50 aircraft for Greece rolled out of the factory at Lockheed Martin Aeronautics Company on the same day in January 1997 - more than a month ahead of schedule. In March 2000, Greece signed a letter of agreement for 50 Block 52+ F-16C/Ds under the Peace Xenia III program. These aircraft will deliver during 2002 and 2003. Greece had an option for 10 additional aircraft to be exercised in late 2001.

In September of 2001, an FMS contract was signed for the Greece III option of 10 Block 52+ aircraft. Acquired under a US Foreign Military Sales deal dubbed Peace Xenia IV, Athens' new aircraft are manufactured to the Block 52+ standard, and powered by Pratt & Whitney F100-229 engines.

On December 13th, 2005 the governments of Greece and the United States signed a Letter of Offer and Acceptance (LOA) for the sale of 30 additional Lockheed Martin [NYSE: LMT] Advanced F-16 Block 52+ aircraft to Greece, with an option for an additional 10 aircraft. The new aircraft will supplement the existing fleet of Hellenic Air Force (HAF) F-16 aircraft and continue the modernization of the HAF. The total program value for the initial 30 aircraft is approximately $ 1.99 billion U.S. Lockheed Martin's portion of the total program is estimated at $1.2 billion US.

On January 3rd, 2006 the U.S. government awarded a $99.7 million contract to Lockheed Martin on December 27 for long-lead tasks related to the production of 30 new Advanced Block 52+ aircraft for Greece. The governments of Greece and the United States signed a Letter of Offer and Acceptance (LOA) for the aircraft earlier in December. The new order included 20 single-place F-16Cs and 10 two-place F-16Ds. The LOA provides Greece an option for an additional 10 aircraft. The new aircraft will supplement the existing fleet of Hellenic Air Force (HAF) F-16s and continue the modernization of the HAF. The total program value for the initial 30 aircraft is approximately $2 billion, with Lockheed Martin's portion estimated at about $1.2 billion.

Many observers expected Greece to make a major fighter aircraft acquisition during the first half of 2009. Though no decisions had been made, according to the local Aviation Lockhead Martin representative, this reduction in the defense budget could favor the purchase of additional F-16s. The Hellenic Air Force (HAF) had an operational near term requirement for 30-40 fighter aircraft. It was the view of the local Lockheed Martin representative that the F-16 is the most likely candidate for the interim/near term solution from an operational and cost effective point of view. European weapons such as the Eurofighter and the Rafale will be difficult to justify and support, given that Greece would incur substantial costs associated with operating a new model of fighter aircraft.

On March 19th, 2009 ceremonies were held at Lockheed Martin in Fort Worth, Texas, to commemorate the F-16 Peace Xenia IV program for Greece. The ceremony marked an important production milestone, demonstrating that the program is on schedule and on budget. This F-16 acquisition is the fourth for the Hellenic Air Force (HAF) and the nation of Greece. The Peace Xenia IV purchase program raised the total fighters ordered by the HAF to 170. The aircraft rolled out today is the first of 30 Block 52 Advanced F-16s being produced in the newest lot. The HAF received the F-16 Block 30 version starting in 1988, the Block 50 version starting in 1997 and the Block 52+ version in 2003.

Greece has been a Lockheed Martin customer since 1943, when it acquired its first squadron of Martin A-30 Baltimore Mk III, IV and Vs. The Peace Xenia IV program includes 20 F-16Cs and 10 F-16Ds, all powered by the Pratt & Whitney F100-PW-229 engine. This first aircraft – a single-seat F-16C model – was accepted by the U.S. government (as agent for Greece in the Foreign Military Sales process) in January 2009, one month ahead of schedule. The US government also accepted the first two-seat F-16D version in January. The first four aircraft were ferried to Greece in May with the remainder following in 2009 and 2010.

Greece had a longstanding concern in 2010 that none of Greece's 60 Peace Xenia III F-16's had their ASPIS II defensive system suites installed. Raytheon and the General Directorate for Defense Investment and Armaments (GDDIA) had been in negotiations over ASPIS II for more than one year to resolve differences to no avail. At issue is the Greek belief that Raytheon did not meet the requirements and specifications of the contract, to include timelines, while our understanding is that Raytheon believes it has addressed all issues in good faith and fixed any shortfalls with the system, and that Greece was pushing for more than what the original contract stipulated.

In 2014 the US State Department made a determination approving a possible Foreign Military Sale to Greece for F-16 sustainment and associated equipment, parts and logistical support for an estimated cost of $188 million. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale on 17 November 2014. The F-16 upgrade will be undertaken through an international bid in which manufacturer Lockheed Martin, with Boeing also having expressed interest. As concerns funding, sources at the MoD say costs will be rationalized and there will be possibilities to conduct the project incrementally.

The US State Department made a determination approving a possible Foreign Military Sale to the Government of Greece for an upgrade of F-16 aircraft to an F-16 Block V configuration. The estimated cost is $2.404 billion. The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale on October 16, 2017.

The Government of Greece requested a possible purchase of an upgrade of its existing F-16 fleet to an F-16 Block V configuration which includes up to one hundred twenty-five (125) APG-83 Active Electronically Scanned Array (AESA) Radars (includes two (2) spares); one hundred twenty-three (123) Modular Mission Computers (MMCs); one hundred twenty-three (123) LINK-16 Multifunctional Information Distribution System Joint Tactical Radio Systems (MIDS-JTRS) with TACAN and EHSI; one hundred twenty-three (123) LN260 Embedded Global Navigation Systems (EGI)/Inertial Navigation Systems (INS); and one hundred twenty-three (123) Improved Programmable Display Generators (iPDGs).

Also included in the proposed sale are up to one hundred twenty-three (123) APX-126 Advanced Identification Friend or Foe (AIFF) Combined Interrogator Transponders (CIT); one (1) Joint Mission Planning System (JMPS); one (1) F-16V Simulator; upgrade to two (2) existing simulators; one (1) Avionics Level Test Station; Secure Communications, cryptographic equipment and navigation equipment; upgrade and integration of the Advanced Self-Protection Integrated Suite (ASPIS) I to ASPIS II on twenty-six (26) F-16s; Ground Support System, systems integration and test; spares and repair parts, support and test equipment; personnel training and training equipment; publications and technical documentation; U.S. Government and contractor engineering, logistical, and technical support services; and other related elements of logistics and program support. The total estimated program cost is $2.404 billion.

This proposed sale will contribute to U.S. foreign policy and national security objectives by helping to improve the security of a NATO ally which is an important partner for political stability and economic progress in Europe. The upgrade of F-16 aircraft to an F-16 Block V configuration will bolster the Hellenic Air Force’s ability to support NATO and remain interoperable with the U.S. and the NATO alliance. It will also help Greece sustain operations in the future, thereby reducing the threat the alliance’s enemies pose to the U.S. and the alliance. The proposed sale will improve Greece’s capability to meet current and future security threats. Greece will use this capability as a deterrent to regional threats, strengthen its homeland defense, and execute counter-terrorism operations.

Greece employs a mix of F-16s in Block 30, Block 50, Block 52+, and Block 52+ Advanced configurations. Therefore, Greece will have no difficulty absorbing the upgrade of these aircraft from an operation and support standpoint.

Greece boasts a fleet of some 150 F-16 fighters, some of which are nearly 30 years old. The F-16s are often scrambled to confront Turkish planes over disputed air space in the Aegean. In December 2019 Defense Minister Nikos Panagiotopoulos told the parliament that 84 of them would be upgraded to the advanced Viper class by 2027. The upgraded planes will have capabilities similar to the much more advanced F-35 fighters, minus stealth technology. The price tag is expected to top out at $1.45 billion (1.2-billion-euros).

The plan to upgrade more than half of the Greek F-16 fighter jet fleet was approved 29 April 2018 during a special meeting of the government's Council on Foreign Policy and Defense (KYSEA) chaired by Prime Minister Alexis Tsipras. "The council unanimously approved the implementation of the 85-plane upgrade program," according to Tsipras' office. The approval came in a meeting of senior Greek military and government officials led by Prime Minister Alexis Tsipras.

The Greek government signed a deal to pay $279.7 million (€250 million) to Lockheed Martin Corporation to modernize and enhance scores of US-made F-16 fighter jets operated by the Greek air force 27 December 2019. The two sides signed the deal after finalizing details on Lockheed's use of a Greek subcontractor.

The deal was originally announced in October 2017 during Tsipras' visit to Washington. But he quickly came under fire over the price tag, estimated then at $2.4 billion over 10 years. According to Defense Minister Panos Kammenos, the US had accepted a revised proposal, taking into account Greece's situation as it works through bailouts from the EU and the International Monetary Fund. The upgrade is expected to run until 2028, with a $146 million cap on annual payments through 2021, due to Greece's bailout obligations.

Lockheed Martin’s partnership with Greece spans more than 70 years. Lockheed Martin has partnered with Greece on numerous military programs, including the F-16, C-130 and P-3, and remains committed to investing in Greece’s future. Together with Greek industry, Lockheed Martin continues to deliver advanced, cost-effective solutions to ensure Greek national security. The combat-proven F-16 plays a vital role in safeguarding Greece’s national sovereignty and defending Greek national airspace from unauthorized intrusions. Hellenic Aerospace Industry (HAI) is currently performing work in Greece on the F-16, C-130J, LM-100J, and P-3B programs. Greek industry produces portions of the C-130J fuselage, F-16 fuselage and intake, and Lockheed Martin has partnered with HAI on the Hellenic Navy’s P-3B maritime patrol aircraft modernization and upgrade program. The F-16V upgrade for the HAF will be performed at HAI, bringing valuable jobs and investment to Greece.