OPINION | Brazil's Gripen Deal

OPINION | Brazil's Gripen Deal

By IndraStra Global Editorial Team 

In August 2015, the crucial decision was made by the Brazilian Air Force (FAB) regarding the purchase of latest fighter jets and military equipment from the Swedish company SAAB Gripen NG, which is eventually based upon various combination of factors. 

Gripen's offer was worth around US$ 6 billion in the initial phase of bidding, back in 2008, while the French competitor Dassault Rafale offered approximately US$ 8 billion. The American company F/A-18 was the only one to offer a fixed price, since it is obliged to inform Congress. Their offer was US$ 7.5 billion. The Swedish plane is also cheaper to operate, as it runs on only a single-engine, have a single-seat, integrated canard design powered by a Volvo-Flygmotor RM12—a derivative of the F/A-18’s General Electric F404-GE-400. Though in general pilots prefer the extra security offered by dual engine planes, knowing that if one engine breaks down, another will remain in operation. 

According to the estimate, the price per hour of flight in a SAAB Gripen NG is around US$ 4,000 when flying in tight formation. The figure for the F-18 model is between US$ 10,000 and US$ 14,000, and for the Rafale, US$ 14,000.These are SAAB's own figures, but they were not contested by the competitors either. There is also the question of technology transfer associated with this deal. The technologies associated with the fighter plane is not 100% transferable, though the French did include the technology transfer clauses in their proposition. The Americans were restricted in this aspect, their tradition of sanctions and embargoes preventing the very concept of manufacturing of American fighters outside the U.S, making it a distant dream too. 

However, Gripen uses many American parts, starting with the engine, which is identical to the F/A-18. It was even rumored that the Americans did not mind the victory of the Swedish company, as long as the French lost out. But, the greatest advantage offered by Saab is that since the New Generation jet is a work in progress based on previous Gripen models, Brazil will be able to actively participate in the process of integration of  avionics and other aviation systems. 

Both Dassault and Boeing offered other advantageous options in the package, including the transfer of sensitive technologies (such as supersonic wind tunnels and composite materials), but their planes are ready, fixed. With Saab the expectation is that the first planes will be imported, but that they will increasingly come to be made in Brazil, as part of a nationalized enterprise. Saab already has one plant running at São Bernardo do Campo. During President Rousseff's government, in the last two years, the proposals have been revised multiple times, but the exact numbers remain a secret. Dassault lowered its commercial proposal by USD $2 billion, but the figures will only become known once the contract had been signed and sealed. But, the contract went to SAAB and the Dassault's proposal went deep into cold storage.

In recent presentations, SAAB has affirmed that it will be possible to establish a composite manufacturing program by incorporating seven years duration into the program, with the first five planes being constructed in the first year. It has also promised that the government's outlay will begin only in the eighth year. Moreover, this is not merely the purchase of 36 planes (28 made for a single pilot; 8 with space for a co-pilot). Long-distance missiles, bombs and tow-able targets for training are all part of a larger package of logistics and training materials. In this purchase of new version of Gripen, Brazil now joins Sweden and Switzerland. The earlier model is used by Sweden, South Africa, the Czech Republic, Hungary, Thailand and the United Kingdom (in the latter case, for training purposes only).

Conclusion:

As JAS-39 Gripen NG soon to be delivered to the Swedish and Brazilian air forces, it will be undoubtedly remain a competitive option in various defense procurement markets around the globe. The Gripen production-cum-assembly line is backed up to 2022, but Saab officials have suggested they could sell upgraded versions of the older air-frames that are in storage. Eventually, able to sell between 300 and 450 jets over the next two decades as revealed during Paris Air Show 2015 press brief.
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