Raytheon upbeat on prospects for Patriot air defence system

By Andrea Shalal

FARNBOROUGH, England (Reuters) - Raytheon Co (RTN.N) on Monday said it saw bright prospects for continued sales of its Patriot air defence missile systems, citing strong interest among its 13 operator countries in adding a 360-degree AESA radar to their existing systems.

The U.S. government last year gave permission for Raytheon to export the new radar to countries that have Patriot missile defence systems. Raytheon says the new radar gives the system a 360-degree view of potential threats, makes it more reliable to operate, and lower its operating and maintenance costs.

Wes Kremer, president of Raytheon's Integrated Defense Systems business, said regular meetings by Patriot operators to decide on potential software and hardware upgrades meant the weapons system would continue to adapt to evolving threats.

"Patriot today is stronger than it’s ever been, and I believe our future is brighter than it's ever been," Kremer told Reuters at the Farnborough International Airshow.

Kremer declined to provide any detailed estimates on how many 360-degree active electronically scanned array (AESA) radar units the company could sell, but all 13 countries that operate the current system are potential candidates.

He said Raytheon was keeping a close eye on developments in Germany, which last year chose Lockheed Martin Corp's (LMT.N) rival MEADS system to replace its Patriots, in the hope that the decision could still be reversed.

The German defence ministry last week notified lawmakers that it might not finish negotiations with Lockheed and local units of Europe's multinational missile firm MBDA about the MEADS system before year-end, raising questions over whether the deal could be finished before national elections in 2017.

Germany announced it would use the MEADS system to replace its Patriot system bought in the 1980s, but set up demanding performance milestones that the companies must meet to retain the contract.

Kremer said Raytheon was convinced that Patriot offered Germany a more reliable and proven system that would also be cheaper to operate and modernise in the future than MEADS.

"The Germans have ... set up very strict gates or checkpoints along the way that they have to meet, both contractually and technically. This is the first indication that some of those things may be challenging," he said.

(Reporting by Andrea Shalal; Editing by Greg Mahlich)