The Two-Horse Large SAR Market: Northrop JSTARS and Raytheon AAS, Neck and Neck

Northrop Grumman’s Boeing 707 JSTARS: The 800-pound Gorilla of Large SAR Radars

 JSTARS (Joint Surveillance Target Attack Radar System) is a US Air Force/US Army effort to mount the large Northrop Grumman AN/APY-3 multimode synthetic aperture radar (SAR) with ground moving target indication (GMTI) on a Boeing 707, for battlefield surveillance purposes. Development aircraft flew in the first Gulf War, and JSTARS has been extensively used in Iraq, Afghanistan, Libya, and elsewhere.

In March 2005, the last of 19 platforms was delivered. Since production has ended, the APY-3 radar and associated C4I systems been upgraded on an ongoing basis, with all platforms brought to Block 20 standard by the end of 2005 and many hundreds of millions of dollars spent since.

In 2007, with the follow-on E-10A SAR/GMTI Multi-Sensor Command and Control Aircraft (MC2A) finally cancelled, it looked like JSTARS would get even more technology transfers, and perhaps complete next generation systems such as the MP-RTIP radar (see report). In June 2008, Congress approved $85 million in the war supplemental to begin funding a version of the MP-RTIP for JSTARS.

But by 2012, the Air Force had not come up with a definite plan for either upgrading or replacing JSTARS, or their 1970s-era Boeing 707 platforms.

A solid-state upgrade to the APY-3 eventually resulted in the radar’s re-designation to AN/APY-7, rather than a different APY-3(V) version (perhaps the Air Force was insecure about the US Navy’s newer P-3C Orion-mounted AN/APS-149(V) radar (see report), thought by some to be superior to JSTARS – “oh, but not to the APY-7!”).

Legacy JSTARS: Gone from the Budget, But Still Very Expensive

In 2013, the US Air Force claimed they would not fund a major JSTARS (Joint Surveillance Target Attack Radar System) upgrade before retirement. On the other hand, the list of JSTARS upgrades in the FY14 budget was a long, long list. And sustainment of the large, sophisticated, and increasingly out-dated Boeing 707 JSTARS has always been extensive and expensive (remember – this is why the USAF wanted to replace it with a similar-capability but more sustainable Recap!). The FY14 USAF budget shrank out-years JSTARS funding without explanation, while retaining the same long laundry list of upgrades.

However, the final legacy JSTARS aircraft was only delivered in March 2005. Radar technology may be advancing, but these are not old systems. They are expensive to maintain, in part due to the choice of used 1970s Boeing 707s and engines, but they are certainly capable of serving for another decade or more, given the USAF reality of front-line F-15s and F-16s from the 1970s and B-52s from the 1950s.

Next-Gen/Recap JSTARS: Finally a (Funded) Plan

In February 2015, the USAF finally enacted formal plans in the FY16 budget for a Next-Generation JSTARS, also referred to as JSTARS Recapitalization (JSTARS Recap). But according to one Air Force official in 2014, “The intent is to build a capability that provides an equivalent to JSTARS. The Air Force is not planning to make it fundamentally different or make it significantly better in performance. The current capability is fantastic. The initial intent is to get a replacement out quickly and have the ability to spiral in better capability later on.”

The most important difference was the plan to use a more efficient/cheaper business jet platform (compared to the relatively ancient and inefficient Boeing 707), though Boeing also offered a 737-based solution, drawing on the 100+ P-8 Poseidons already in production.

Ten-Year Recap Development Program… Cancelled

But despite the “not significantly different” sensors or capabilities planned, this was still scheduled as a 10-year development effort, with full operational capability (FOC) originally not expected until late 2026. And Teal Group reminded readers at the time that, despite much bad press about the “ancient” 707 aircraft, JSTARS Recap was an attempt to replace a relatively new system – the last JSTARS system had only been in service for 10 years, and with constant upgrades – with a system that would have the same capabilities….

Not unexpectedly (according to our forecast), funding was almost immediately reduced and schedules extended. In February 2015, the President’s Budget cut FY16 JSTARS Recap funding by $289.8 million. Following a brief TMRR (Technology Maturation and Risk Reduction) phase, in December 2016 the USAF released the EMD request for proposals (RfP) for JSTARS Recap.

Regarding the new radar, in 2017 the Air Force notified Raytheon that its “Archimedes” radar was no longer under consideration for Recap. In late 2017, Raytheon protested the US Air Force’s decision, but by January 2018 the GAO had dismissed Raytheon’s protests – Northrop Grumman would develop the Recap radar.

Then it all started to go wrong –as we had forecast. Since September 2017, numerous Air Force leaders began to question replacing JSTARS with a like-for-like system, and began considering alternative platforms – stealthy, UAVs, etc. – that could perform the mission with a greater chance of surviving in an A2/AD (Anti-Access/Area Denial) environment.

In February 2018, the Air Force announced it intended to cancel the JSTARS Recap program, with funding to end after FY19, despite its 2016 plan for a $6.9 billion EMD phase – and $417 million already budgeted to be spent in FY19.

Advanced Battle Management System (ABMS): Also Not Ready

In May 2018, Congress countered with a US legislative provision that would require the USAF to proceed with the JSTARS Recap program, and also approved legislation which restricted funding for the Air Force’s Advanced Battle Management System (ABMS) initiative proposed as an alternative to JSTARS Recap in the Air Force’s FY19 budget request, as well as a portion of the proposed divestment of legacy JSTARS aircraft.

But JSTARS Recap Definitely Dead

But by mid-2021, JSTARS Recap is definitely dead (and removed from our report title), and good old JSTARS continues to be in great demand by the services and to receive between $300-350 million dollars – annually!!! – in upgrade & support.

Our Future USAF Large SAR/GMTI Radar & C4I Forecast

Due to our hesitancy over JSTARS Recap’s future, a few years ago we added separate Future USAF Large SAR/GMTI Radar & C4I forecast lines, with final systems and contractors still very much Undetermined.

But with the Air Force’s new ABMS program now also suffering major funding reductions in Biden’s FY22 budget in May 2021, and with ABMS looking more and more like a minor C4I technology program than a JSTARS replacement, it seems the brilliant JSTARS with the APY-7 radar will keep flying for another decade or more. Our JSTARS funding forecasts remain strong, but we have reduced our near-term forecasts for a direct JSTARS replacement system.

By the way, some ABMS program funding is now included within our Future USAF Large SAR/GMTI Radar & C4I forecast lines, but much or most ABMS funding is currently going to programs not really intended as a JSTARS replacement.

And Teal’s JSTARS Funding Warning from 2018…

In 2018, we suggested the Air Force was cooking the books and scamming the media re how much they were actually spending on JSTARS. And, frankly, they were. Dropping legacy JSTARS funding from the budget, reducing E-8 Modifications procurement to almost nothing, and eliminating the JSTARS Program of Record funding element after FY14 (PE# 0207581F) – back in February 2018 with minor funding in FY19 and FY20 only – did not mean those 16 aircraft would fly for nothing for another decade.

We now know legacy JSTARS aircraft will likely remain in service for at least another decade, and finally we also have public announcements of Northrop’s annual TSSR (Total System Support Responsibility) contracts for JSTARS – worth between $300-350 million dollars – annually.

Why pay so much? Because JSTARS is a 100% necessary and proven capability for the US, NATO, and pretty much everyone else “on our side.” No other system that has ever flown has provided full JSTAR capabilities. In an odd comparison, the UK threatened to retire (and has now retired) their own R.1 Sentinel ASTOR SAR/GMTI ISR aircraft, which is based on a business jet and has much less capability than JSTARS (Next-Gen JSTARS be warned…). The casualties and attrition in recent campaigns would have been considerably greater without JSTARS, and all the services (and other NATO nations) agree on this. JSTARS is considerably more important – and, crucially, less replaceable – than the F-35 JSF or Global Hawk. JSTARS will not be retired until it has been replaced.

Thus, hundreds of millions of dollars will continue to be spent – annually – to support (and yes, upgrade) legacy JSTARS Radar & C4I systems over the next decade.

So… What Will Replace JSTARS?

By their cancellation in February 2018, Next-Gen/Recap JSTARS radars and C4I systems had not even reached the EMD stage. Only the Technology Maturation and Risk Reduction (TMRR) had been conducted. According to the USAF, the TMRR phase, “will better inform the government about the integration complexity and associated lifecycle risks involved with different system-level design solutions. Activities will also include studies, analyses, and risk reduction activities addressing all subsystems to support current program planning/execution and future program planning.”

Thus, even the concepts behind new JSTARS radars and C4I systems were still uncertain and highly changeable. When a JSTARS is again revisited (which might be soon), it will likely be a long process, full of delays, awards, protests, and more awards and contracts (these were also our exact words from 2015’s Teal Group Evaluation, from before Raytheon’s Archimedes radar protests…).

Finally, lest another long delay in updating the MEB’s JSTARS report was an issue (for which we apologize, again), now in mid-2021 our total combined forecasts are also pretty similar to our forecasts in 2018 – and 2015. Yes, we’ve seen these same program changes before in numerous other major US programs, from F-22 to JSF and beyond….

The Challenger: Raytheon’s P-3C LSRS & Boeing P-8 AAS

Raytheon’s AN/APS-149(V) Littoral Surveillance Radar System (LSRS) is a classified and little-known surveillance radar that was first seen by the public in 2007, mounted on US Navy P-3C Orion maritime patrol aircraft (MPAs). Its ventral “canoe” antenna, and reported capabilities, are equivalent to those of Northrop Grumman’s earlier AN/APY-3 JSTARS radar, and include a primary targeting capability. Seven radars had already been delivered by mid-2007, with 16 modified Orions reportedly capable of carrying the radar. Though some AAS-related contracts have been announced, the program has never had an unclassified budget line or documentation. None of its elements have reportedly been competed or subjected to a formal analysis of alternatives process.

Despite a continuing lack of information, reports indicate that by the early 2020s Raytheon was providing continuing mission support of Navy operations, logistics, and sustaining engineering of the APS-149 LSRS through multi-year performance-based contracts.

APS-149 LSRS (P-3C Orion)

The existence of Raytheon’s APS-149 LSRS came as a surprise, but it probably shouldn’t have. Navy P-3C Orions have increasingly been used for overland surveillance, but their Raytheon AN/APS-137 ISAR is really not the best radar for this task. Raytheon has immense experience with cutting edge AESA SARs, from the ISR ASTOR (manned) and MP-RTIP (Global Hawk), to the Super Hornet’s AN/APG-79.

The Navy may have bought a full set of 16 radars for its BMUP Orions (with production possibly ending in 2009), making the APS-149, suddenly, quite a major program. And, we must congratulate them on their efficient (if secret) procurement. The Navy is not known for actually getting new systems in the field (A-12, P-7, ASPJ, DD(X), ATIRCM, J-UCAS, etc), and they seem to have done a classified end run to provide a very Air Force-JSTARS-like capability. Sixteen SAR/GMTI P-3Cs would provide a huge all-weather ISR capability. Our hats are off to the Navy.

By 2012, LSRS P-3Cs had been extensively used both to support combat operations—not only for the Navy—and for tests and demonstrations, including tracking both land and maritime moving targets for engagements by stand-off missiles.

Our APS-149 forecasts are highly speculative – there is still practically no unclassified documentation on which to base them. However, the nineteen JSTARS radars routinely received more than $100 million in annual funding for RDT&E and upgrade and support, after production ended. Sixteen LSRSs may not be far behind, especially as the Navy has fewer big SAR programs – such as MP-RTIP – across which to amortize expenses (though Raytheon certainly does).

APS-154 AAS (Boeing P-8 Poseidon)

In mid-2008, it became known that the Navy was developing Boeing’s 737-based P-8A Poseidon Multimission Maritime Aircraft (MMA) with the “provision” to mount the APS-149, although the re-designated AN/APY-10 development of Raytheon’s P-3C legacy AN/APS-137(V) radar was still planned and under contract as the primary maritime radar for all P-8As.

Then in July 2009, Raytheon won a multi-year contract to develop an advanced version of the APS-149 for the P-8A, now designated the AN/APS-154(V) Advanced Airborne Sensor (AAS) – which is forecast by the Navy to be superior to the upgraded/current US Air Force JSTARS AN/APY-7 radar.

By early 2011, information on P-8A AAS development had disappeared from view, but in June 2012 it was announced that AAS Milestone B had been approved. The total number of AAS systems to be procured had not yet been decided by the Navy, and IOC schedules are classified, but it was initially believed IOC would follow fielding of the P-8A Increment 2 upgrade around 2016.

By early 2013, additional AAS configuration details had been released. The AAS will be a dual-sided AESA radar with a 40-ft-long antenna housed in a pod mounted on an extendable trapeze under the forward fuselage on P-8As fitted with structural provisions for the pod.

In May 2015, the Navy reported the first flight of an AAS-configured P-8A Poseidon. In early 2016, the US Navy was still integrating and testing the first AAS aboard a P-8A, but reports have been scarce since.

By mid-2018, both funding and schedules and milestones remained classified, but reports indicated that the Navy planned to conduct operational test events for the AAS in the FY19-FY20 timeframe.

Our AAS Forecast

Since the P-3C was literally falling apart (70 of 120 combat-coded airframes were grounded in 2009, though 33 had been returned to flying status by November 2010), the Navy needed the P-8A in the air right away, gold-plated or not, and many future capabilities – including substantial additional ISR – were planned for spiral developments.

The AAS radar will not be built for every P-8A, but the Navy has already spent big money just to determine how many to buy. In March 2013, it was announced Boeing would receive a $138 million, four-year Navy contract to conduct engineering analysis and additional fatigue testing on the P-8A Poseidon to determine the effects on airframe life of carrying the pod-mounted AAS. A fundamental goal of the analysis will be to evaluate different fleet mixes of AAS surveillance and P-8A maritime-patrol mission profiles to identify an optimum mix for future operations.

Our forecast is thus highly speculative, but the Navy will undoubtedly at least replace the 16 APS-149 radars, and perhaps buy twice that many, or more.

On the other hand, with the AAS still in early development a few years ago, and less of an urgent classified program envisioned then the APS-149 (which was still new and performing well), Teal Group forecast that the typical delays in most major development programs would slowly creep in – in part because the Navy will want a gold-plated “keeper” radar for its P-8A, potentially to remain in service for decades. We doubted a 2016 IOC, and it was not until May 2015 that the first flight of an AAS-configured P-8A was reported.

In early 2016, the US Navy was still integrating and testing the first AAS aboard a P-8A, but reports have been scarce since. By mid-2018, both funding and schedules and milestones remained classified, but reports indicated that the Navy planned to conduct operational test events for the AAS in the FY19-FY20 timeframe.

Our US Navy forecasts are thus speculative, but AAS should be a huge program, with the probability of several production radars per year in full-rate production.

We have also added a speculative Undetermined AAS production forecast – possibly for a few more US Navy systems, but primarily for international buyers, possibly even NATO in the future….

Recap/Future JSTARS Dark Horse: Navy’s Poseidon and AN/APS-154 AAS

In April 2018, sources at the US Navy addressed what might have become a very sore point for the US Air Force – potential replacement of the much-hailed JSTARS with the very low-key Boeing P-8A Poseidon and its Raytheon AN/APS-154 Advanced Airborne Radar (AAS) (see report). In fact, a version of the AAS (“Archimedes”) was what Raytheon offered for its JSTARS Recap radar. But, initially without even a formal rejection of Archimedes, Northrop’s APY-7 JSTARS-derived radar was chosen by the USAF for the Recap program.

According to Capt. Tony Rossi, the Navy’s P-8A Program Manager for Naval Air Systems Command (NAVAIR), “If [the Air Force] were to get out [of the E-8C JSTARS mission area], could a similar radar on a P-8 be a possibility? Potentially.” But Teal Group believes the biggest sticking point would likely be that the P-8A Poseidon is also based on a Boeing civilian airliner (the 737 versus the JSTARS’ 707). For its oversea MPA mission the Poseidon does not face the same A2/AD (Anti-Access/Area Denial) threat as JSTARS will for overland operations – this future threat is indeed the USAF’s primary reason for seeking to stop JSTARS Recap entirely and look at different platforms or solutions to replacing the JSTARS mission.

On the other hand, the Navy’s P-3C Orion with the LSRS radar has been successfully performing the JSTARS mission – overland SAR/GMTI with onboard C4I – since 2006. The Navy has claimed the LSRS matches JSTARS (APY-3) capabilities. With the brand-new, just-developed AAS on the Poseidon, it is likely that capabilities will exceed the APY-3 and possibly exceed the APY-7 on the legacy JSTARS. And, the USAF made clear that it was only seeking JSTARS-equivalent capabilities from the Recap radar, and was mostly looking to reduce expenses from the ancient Boeing 707 and aging APY-3/7. Well, brand new 737s and a brand new AAS would seem to fit the bill. Done, developed, and already in production.

AAS Likely for UK and FMS; So, What’s the USAF’s Problem?

The United Kingdom and India have already swallowed their pride and taken the easy way out by buying Poseidons for MPA, instead of investing billions of dollars to develop their own solution (aka, Nimrod replacement…). We forecast the UK will likely follow on with substantial Raytheon AAS radar purchases in the future – to replace their recently retired (March 2021) Sentinel R.1 aircraft fleet which carried the also-Raytheon ASTOR radar (see report).

And Australia, Norway, New Zealand, Korea, and others are also buying Poseidon fleets. Buying a number of AAS-equipped Poseidons will be a cheap and easy way to add a hugely valuable overland capability to many air forces. So – what was the Air Force’s problem with Poseidon/AAS for JSTARS Recap???

Well, Teal Group believes the Air Force is simply too parochial to allow the Navy to take over (or provide the aircraft for) their overland JSTARS/airborne ISR/C4I mission. In fact, some of the continued classified status for the LSRS and AAS radar programs could even be to avoid making it too obvious that the Navy is just as good (or now, with AAS, better) at this mission as the Air Force’s old JSTARS. Since the Navy has also largely avoided criticizing the late, expensive F-35 JSF – while at the same time buying as few as possible and recently extending their F/A-18E/F Super Hornet buy for another several years/hundred aircraft – we suspect these two bedmates are happy to revel in their continued taxpayer funding boom while agreeing to not criticize each other’s most expensive (and/or wasteful) programs – the Navy doesn’t criticize aircraft and the Air Force says nothing about ships. Perhaps like in any successful marriage.

So we did not forecast AAS radars for JSTARS Recap, and do not think AAS would be a likely choice for a future JSTARS radar. Even though that would be an obvious and economically efficient solution.

But we DO forecast a significant Undetermined Poseidon/AAS market, especially for international buyers, as the AAS technology is released.

And the Winner, by a Nose, is… Raytheon (At Least for the Next Decade)

Perhaps no longer Teal Group’s 800-pound gorilla of a couple of decades ago, but even without a major upgrade the legacy Northrop Grumman JSTARS Radar & C4I programs will still be worth $1.0 billion in our forecast period, with Northrop-favored Future USAF Large SAR/GMTI Radar & C4I funding ramping up to $640 million in FY30 and worth $2.6 billion overall in our forecast period.

Which leaves Raytheon. Though perhaps only a “moderate” major program by today’s JSF-inflated funding standards, Raytheon’s LSRS and AAS combined should be worth more than $500 million annually for the next few years as US Navy production continues, for a total of $4.6 billion in our forecast period.