U.S. troops are conducting training exercises with Iraqi divisions, emphasizing teaching the Iraqis to work with air power. The U.S. is using F-16s, which the Iraqis are negotiating to buy. In the meantime, the U.S. Air Force will apparently stand by (possibly in Kuwait, but perhaps in Iraqi air bases) to provide air defense and ground support capabilities.
All this is because, while U.S. combat troops are scheduled to be out of Iraq by 2011, the Iraqis point out that they have an army and navy, they still don't have much of an air force. Currently, the Iraqi Air Force consists of transports, helicopters and prop driven recon aircraft. No jet fighters, which are essential for defending the national air space. No nationwide air defense system (radars and missiles) either. They want to know what can be done in two years.
Well, it's possible to get some second hand F-16s and get some minimally trained pilots for them. It's also possible to buy and install a radar system and some anti-aircraft missile batteries. Iraq would probably have to hire some foreign technicians to help maintain the radars, jets and missile system. These would be replaced by Iraqis in 5-10 years. But it all costs money, and Iraq has no credit, and too many demands on their oil income (which accounts for most of the government budget.)
Last year, the Iraqi Air Force leadership convinced the government to spend $1.5 billion to buy a squadron of 18 new F-16 jet fighters (and train pilots and set up maintenance facilities). The U.S. was inclined to cooperate, and sell Iraq the 96 F-16s Iraqi Air Force wants to eventually purchase over the next decade.
The F-16 is currently the most popular fighter aircraft in service. Two years ago, Romania bought 48 F-16s for $4.5 billion. Half will be the latest model, the F-16C /50. The others will be used, and reconditioned to F-16C/25 standards. Romania could have waited a few years and bought the new F-35 instead, but that would have cost them more money (nearly $6 billion for just 24). Romania did the math and realized that 48 F-16s would be more than adequate to handle any neighborhood spats. And if Russia became a problem, Romania is now a member of NATO, and capable of calling on some very big allies. Iraq wants the same kind of arrangement, along with the latest model of the F-16, which would be a match for what the Israelis are using. Moreover, neighboring Turkey and Jordan have done well with this model. But the real threat to Iraq is Iran, who can be handled with second-hand, early model, F-16s. That would cut Iraq's F-16 bill by over a billion dollars.
The U.S. still has about 1,300 F-16s in service (about half with reserve units). Over 4,200 F-16s were produced, and America has hundreds in storage, available for sale on the used warplane market. The end of the Cold War in 1991 led to a sharp cut in U.S. Air Force fighter squadrons. Moreover, the new F-35 will be replacing all U.S. F-16s in the next decade. So the U.S. has plenty of little-used F-16s sitting around, and many allies in need of low cost jet fighters.
Meanwhile, Iraq is expanding its air force to over 140 aircraft and 6,000 personnel. Within five years, it plans to have over 500 aircraft, most of them non-combat types. By 2015, Iraq wants to have about 35 squadrons (14 fighter, 5 attack helicopter, 5 armed scout helicopter, 2 transport, 2 reconnaissance, 1 fixed wing training, 1 helicopter training, 3 helicopter transport, 1 utility/search and rescue, and 1 special operations). The $1.5 billion the air force needs for its first 18 F-16s includes what it will cost to build maintenance and training infrastructure for that type of aircraft.