Airshow - Combat use of F-16s in Mideast spurs fresh demand, says Lockheed

By Andrea Shalal

DUBAI (Reuters) - Combat use of Lockheed Martin Corp's F-16 fighter jets in air strikes over Yemen, Syria and Iraq is spurring fresh demand for the warplane, which has sold 4,588 times and is in use by 27 countries, according to Lockheed officials.

Randy Howard, director of Lockheed's integrated fighter group, told Reuters that current F-16 orders would keep the production line running through the fourth quarter of 2017, but other opportunities in Indonesia, the Gulf, eastern Europe and other regions could extend the line well into 2019 and beyond.

Rick Groesch, regional vice president for Lockheed in the Middle East, said a number of countries in the Gulf already operated F-16 jets, but others were taking a closer look after seeing successful use of the jets against Islamic State militants in Syria and Iraq, and insurgents in Yemen.

Combat operations are "certainly opening the eyes of the various air forces to the sense that it makes to have interoperability with your neighbor if you're flying," Groesch told Reuters.

Lockheed has sold F-16s to Oman, Bahrain, Iraq, Jordan, Egypt and United Arab Emirates, but remains in discussions with Kuwait, Qatar and Saudi Arabia about other potential opportunities, Groesch said.

He said low operating costs and the advantages of being able to operate seamlessly with other air forces were big selling points. "They need the best bang for their dollar," he said. "They're starting to see that in the F-16."

Howard said Lockheed expected a decision in the next weeks or months from Indonesia, where the F-16 is competing for an order of about 15 jets against the Gripen built by Sweden's SAAB , Russia's SU-35, and others.

Lockheed is also gearing up for a potential new Indian fighter competition in coming years after India truncated its order for fighter planes from France's Dassault Aviation from 126 to 36 jets.

Lockheed Chief Executive Marillyn Hewson met with Indian Prime Minister Narendra Modi when he visited the United States in September, and sources say the company is ready to set up a manufacturing line for the F-16 in India, a key priority under the country's "Make in India" initiative.

Lockheed set up similar F-16 assembly plants in Turkey, Portugal, Belgium and the Netherlands in the past.

U.S. officials are also discussing the sale of eight more F-16s to Pakistan as part of a larger aid package, according to sources familiar with the matter.

(Reporting by Andrea Shalal; Editing by Mark Potter)