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Iraqi Air Force T-6A trainer aircraft

US Firm wins $15.7m Iraq Training Deal

By John Lee.

Spartan Air Academy Iraq LLC, Irving, Texas, has been awarded a $15,684,449 firm-fixed-price modification (P00006) to contract FA8617-20-C-6232 for the Iraq T-6A contractor logistics support and training maintenance program.

The modification provides for the exercise of an option to extend the term of the contract for the continued services needed in order to effectively maintain and operate a fleet of 15 T-6A training aircraft.

Work will be performed at Balad Air Base, Iraq, and is expected to be completed June 30, 2021.

(Source: US Dept of Defense)

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Ahmed Tabaqchali, AMT IRIS 2 resized

Market Review: "The Dog Days of Summer"

By Ahmed Tabaqchali, CIO of Asia Frontier Capital (AFC) Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Market Review: "The Dog Days of Summer"

The subdued "dog days of summer" were further subdued this year as the month of August was shortened by an Eid holiday that rolled into an extended lockdown at its start, and the beginning of the annual 40-day Arbaeen pilgrimage at its end.

The market, as measured by the Rabee Securities RSISX USD Index (RSISUSD), rose 3.8% during August's 12 trading days, and is up 30.6% from the multi-year lows in April. The market's daily turnover continued to gradually increase after the declines following the lockdown starting in March - an increase encouraged by the market's better tone since then (chart below).

Banks, which led the market's recovery, were mostly flat, after their recent strong performances, and will likely experience some profit-taking during September given the expected slowdown in activity coinciding with the Arbaeen pilgrimage which finishes in the first week of October. While the pilgrimage will likely be more low-key than normal this year, given social distancing rules, early reports on the activities of pilgrims are mixed on the adherence to these rules.

(Source: Iraq Stock Exchange, Asia Frontier Capital, data as of August 31st. Turnover excludes block transactions)

The Iraq Stock Exchange (ISX) continued with its investors' Zoom conference calls initiative in which ISX-listed companies discuss their recent earnings results and outlook for the year. Among the leading companies recently presenting were Pepsi bottler Baghdad Soft Drinks (IBSD) in late July, mobile operator AsiaCell Communications (TASC) and Commercial Bank of Iraq (BCOI) both in August.

The initiative, a first for the ISX and its listed companies, has been promising in increasing investor understanding of the companies, their business plans, and outlooks - especially taking into account the effects of the disruptions to economic activities post-lockdown. This is a welcome development that is vastly different from the usual dearth of meaningful information beyond the annual reports and spartan quarterly reports which has traditionally led to rumours filling the information vacuum. The ISX intends to continue this initiative over the coming quarters and for the ISX-listed companies to proactively engage with investors.

Economic activity this summer seems to have mostly returned to pre-lockdown levels as can be seen from the Google mobility chart below. Encouragingly, this happened even after taking into account the effects of two Eid holidays in which each holiday was bundled into a 10-day lockdown, and the recent rolling Thursday-Saturday lockdowns which cut the working week to four days from five.

(Baseline is the median, for the corresponding day of the week, during January 3rd - February 6th,

Source: Google, data as of August 28th)

This recovery in activity built up gradually over the last few weeks as can be seen above, and it would have likely contributed to the healing of the economy from the shock brought about by the lockdown. However, it should be noted that the decline in activity as a result of the initial lockdown in March-May would have likely been more precipitous than shown in the above chart as activity in the retail, transport and hospitality sectors was subdued during the baseline period given the chilling effects of the dramatic events at the beginning of the year. More so, these events came on the back of a slowdown induced by the continued countrywide demonstrations since October 2019. Nevertheless, the recovery in economic activity is a positive development should it be sustained.

While there isn't any new economic data that might provide a fuller picture, the decline from 4.8% to 3.1% in the premium of the market price over the official price of the Iraqi Dinar (IQD) versus the USD is a positive added to the mobility data above - even though the current premium is much higher than the 1.2% that it averaged in 2019. Moreover, it is too early to conclude whether the decline in the premium is due to an easing of the flight to safety, i.e. the hoarding of the USD, or, if it's due to weak demand for imports - an important indication of economic activity and consumer confidence given the high dependence on imports to satisfy consumer demand.

(Source: Central Bank of Iraq, Iraqi Foreign Exchange Houses, Asia Frontier Capital, data from January 1st to August 28th)

The market's recovery over the last four months notwithstanding, arguably, the claim made here in May still stands that the 'worst-case' prognosis for Iraq in the wake of the carnage brought about by COVID-19 will not be as bad as originally feared, however the market continues to price it in.

Please click here to download Ahmed Tabaqchali's full report in pdf format.

Mr Tabaqchali (@AMTabaqchali) is the CIO of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years' experience in US and MENA markets. He is a non-resident Fellow at the Institute of Regional and International Studies (IRIS) at the American University of Iraq-Sulaimani (AUIS), and an Adjunct Assistant Professor at AUIS. He is a board member of the Credit Bank of Iraq.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

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Iraqi Air Force T-6A trainer aircraft

US Firm wins $15m Iraq Training Deal

By John Lee.

Spartan Air Academy Iraq LLC, Irving, Texas, has been awarded a $14,769,952 firm-fixed-price modification (P00006) to contract FA8617-20-C-6232 for the Iraq T-6A contractor logistics support and training maintenance program.

The modification provides for the exercise of an option to extend the term of the contract for the continued services needed in order to effectively maintain and operate a fleet of 15 T-6A training aircraft.

Work will be performed at Balad Air Base, Iraq, and is expected to be completed Dec. 31, 2020.

(Source: US Dept of Defense)

 

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Iraqi Air Force T-6A trainer aircraft

US Firm wins $25m Iraq Training Deal

By John Lee.

Spartan Air Academy Iraq LLC, Irving, Texas, has been awarded a $24,863,731 firm-fixed-price contract for contractor logistics support (CLS) services.

The contract provides for CLS services and material support for 15 T-6A aircraft.

Work will be performed at Balad Air Base, Iraq and is expected to be completed by June 30, 2020.

(Source: US Dept of Defense)

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Iraqi Air Force (Spartan Air Academy)

US Firm wins $31m Iraq Training Deal

By John Lee.

Spartan Air Academy Iraq LLC, Irving, Texas, has been awarded a $31,477,060 task order, against indefinite-delivery/indefinite-quantity contract for continued Air Academy training in support of the Iraqi Air Force.

Work will be performed at Balad Air Base, Iraq, and is expected to be completed by July 8, 2020.

This award is the result of a country-directed sole-source acquisition.

(Source: US Dept of Defense)

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Iraqi Air Force (Spartan Air Academy)

US Firm wins $45m Iraq Training Deal

By John Lee.

Spartan Air Academy Iraq LLC., Addison, Texas, has been awarded a $45,000,000 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the stand-up of an Air Academy training in support of the Iraq Air Force.

Work will be performed at Balad Air Base, Iraq, and is expected to be complete by Feb. 8, 2019.

This award is the result of a country-directed sole-source acquisition.

(Source: US Dept of Defense)

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Spartan College

Spartan College wins $1bn Iraq Training Deal

The US State Department has approved a possible Foreign Military Sale to the Republic of Iraq for pilot and maintenance training, contractor logistical support (CLS) for trainer aircraft, and base support.

The estimated cost is $1.06 billion. The Defense Security Cooperation Agency (DSCA) delivered the required certification notifying Congress of this possible sale on April 11, 2017.

The Government of Iraq has requested a possible sale of pilot training; maintenance training; and contractor logistical services support for C-172, C-208, and T-6 aircraft for up to five (5) years to include contractor aircraft modification; repair and spare parts; publications; aircraft ferry; and miscellaneous parts, along with training base operation support, base life support, security, construction, and other related elements of program support. The estimated total program value is $1.06 billion.

The proposed sale will contribute to the foreign policy and national security of the United States by helping to provide for a stable, sovereign, and democratic Iraq, capable of combating terrorism and protecting its people and sovereignty. Iraq currently owns twelve (12) C-172, five (5) C-208, and fifteen (15) T-6 training aircraft.

The training pipeline will allow the Iraqi Air Force to tailor pilot training for several U.S.-origin operational aircraft. The C-172s and T-6s are Iraq’s training platforms for their mobility and fighter attack fleets. The C-208s are Iraq’s platform of choice for training its Intelligence, Surveillance, and Reconnaissance (ISR) pilots.

The proposed sale of training and support services will improve the Iraq’s ability to train its pilots and maintenance technicians. By training its own pilots and maintenance technicians in-country, Iraq will decrease its overseas training requirements, significantly reduce its training costs, and will enhance its ability to take over the sustainment of its aircraft.

Iraq will have no difficulty absorbing this support. In addition to its primary mission – pilot and maintenance training for Iraqi Air Force personnel – this proposed sale includes Contractor Logistical Support costs for the trainer aircraft, as well as possible future construction and base operation support costs.

The proposed sale of this training and support will not alter the basic military balance in the region.

The principal contractor is Spartan College, Tulsa, Oklahoma. At this time, there are no known offset agreements proposed in connection with this potential sale.

Implementation of this proposed sale will require the assignment of approximately four U.S. Government representatives and 50-55 contractor representatives to Iraq.

There will be no adverse impact on U.S. defense readiness as a result of this proposed sale. All training and support listed on this transmittal are authorized for release and export to the Government of Iraq.

This notice of a potential sale is required by law and does not mean the sale has been concluded.

(Source: Defense Security Cooperation Agency)

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