Procurement - Swedish Jets Cheap But Not That Cheap

The recent sale of 22 Swedish JAS 39E Gripen jet fighters to Switzerland was accompanied by an increasingly more common sweetener. The Swedes will have Swiss firms manufacture some of the aircraft components ($213 million worth). This is about six percent of the cost of the 22 JAS 39E s ($3.3 billion or about $150 million each). The cost includes training, spare parts, technical support and so on and amounts to more than the actual cost of the aircraft. So it’s no wonder Sweden is willing to move some of the aircraft production to the nation buying the aircraft and all the accessories.

 

There’s another reason for the Swedish move. The Swedish government was reluctant to spend billions to finish development of the JAS 39E. But the Swiss order made all the difference. As a result, earlier this year the government also agreed to let the Swedish Air Force increase its order for the JAS 39E jet fighter from 40 to 60. This decision caused some distress in Sweden as the Swiss will be getting a lower price than the Swedish Air Force. Given the shrinking defense budgets these days, this sort of sales technique was necessary to get enough orders to make it possible to go ahead with the JAS 39E. It was only a year ago that the Swedish Air Force was allowed to build prototypes of the JAS 39E. This happened mainly because Switzerland expressed an interest in buying some. 

 

The Swiss deal could still come apart and that would likely kill the 39E, for the moment anyway. If that does not happen the first 39E will enter service in 2018, and all 82 current orders would be delivered by 2027. This might change if more export orders are obtained, something the Swedes are hustling to accomplish. The Swedes have always had to scramble to sell the Gripen in the face of intense competition from new and used American (especially used F-16s), Russia and European jet fighters. Currently EADS, the manufacturer of the Eurofighter, is threatening to upset the Gripen deal by offering 22 second hand Eurofighters for half what the new JAS 39Es. This sort of thing is possible because several nations are cancelling orders for Eurofighters, an aircraft designed at the end of the Cold War. With the Soviet Union gone, orders for Eurofighters were cut, and continue to be cut. This has created a market for used Eurofighters, which compete with used F-16s. While the new Gripen may be more suitable to Swiss needs, a 50 percent discount is very attractive. The Swedes are now under pressure to sweeten a deal that may be getting too expensive for the seller.

 

Formerly known as the Gripen NG (Next Generation) fighters, the JAS 39E is heavier (17 tons) that the existing 39C, has better electronics, a heavier payload (over four tons), and has a two seater version better able to handle ground attack and electronic warfare duties. The Swedish Air Force already has 134 JAS 39Cs in service and the prospect of more defense budget cuts made the purchase of 60 Gripen NGs (at a total cost of nearly $5 billion) seemingly impossible. But the JAS 39E excited several export customers and that made all the difference.

 

Sweden is describing the 39E as a "new aircraft" compared to the earlier JAS 39 models. There's some truth to that, as the 39E is a little longer and heavier but still looks like a Gripen. The 39E is full of more expensive, and capable, electronics, but that's not obvious by just looking at the new model. The first 39E is expected to fly this year and enter service in 2018.

 

The Gripen has already undergone one major enhancement to the JAS 39C model. Improvements included inflight refueling, better electronics, and improved ground attack capability. The C model was also compliant with NATO standards for warplanes. This was necessary for export sales. There was also a two seat D model for training.

 

The 14 ton JAS-39C is roughly comparable to the latest versions of the F-16. The Gripen is small but can carry up to 3.6 tons of weapons. With the increasing use of smart bombs this is adequate. Often regarded as an also-ran in the current crop of "modern jet fighters", the Swedish Gripen is proving to be more competition than the major players (the F-16, F-18, F-35, Eurofighter, Rafale, MiG-29, and Su-27) expected. Put simply, Gripen does a lot of little (but important) things right and costs about half as much (at about $35 million each) as its major competitors. More importantly, Gripen also costs about half as much, per flight hour, to operate. In effect, Gripen provides the ruggedness and low cost of Russian aircraft with the high quality and reliability of Western aircraft. For many nations this is an appealing combination. The Gripen is easy to use (both for pilots and ground crews) and capable of doing all jet fighter jobs (air defense, ground support, and reconnaissance) well enough.

 

The JAS 39 entered active service in 1997, and has had an uphill battle getting export sales. Sweden does not have the diplomatic clout of its major competitors, so they have to push quality and service. Swedish warplanes and products in general have an excellent reputation in both categories. 

Nevertheless, the Gripen is still expected to lose out on a lot of sales simply because politics took precedence over performance.

Switzerland arming in preparation for European meltdown?

The Swiss Army is preparing contingency plans for violent unrest across Europe. A nation mostly famous for its banks, watches and chocolate fears it may face a massive influx of European refugees in the near future.

One of the world’s richest nations openly expressed concerns over the possible outcome of Europe’s continuing financial troubles, and is currently conducting army exercises against the possibility of riots along its borders.

In September, the Swiss military conducted exercises dubbed ‘Stabilo Due,’ with scenarios involving violent instability across the EU.

Switzerland has maintained an avowedly neutral stance for decades, and refused to join the eurozone when presented with the opportunity.

Bern’s biggest fear is likely the disorganization of neighboring nations’ armies that would follow general instability; the eurozone crisis and the severe austerity measures in the EU are forcing member-states to significantly slash their military budgets. If protest continues to spread across Europe, police and armed forces may find themselves ill-equipped to manage the unrest.

"I will not rule out that we will need the army in the coming years,” Swiss Defense Minister Ueli Maurer said last Sunday.

The Swiss Defense Ministry has pressed ahead to modernize the country’s army despite political opposition. With its multibillion-Franc military budget and an army of around 200,000 soldiers, the country also plans to purchase new ‘Saab Gripen’ jet fighters.

 “Minister Maurer, accompanied by whispers from the top uniformed leadership in Switzerland, is trying to raise awareness that Europe’s massive fiscal-cum-political crisis could get very unpleasant,” John R. Schindler, a professor of national security affairs at the US Naval War College wrote in an article for the XX Committee website.

The Chief of the Swiss Armed Forces, Lieutenant General André Blattmann, likewise revealed plans to deploy an additional four battalions of military police (1,600 soldiers) to protect strategic points across the country. Blattmann is expected to present the plan in December.

Professor Schindler predicts that, “if the next Anders Brievik were to target Muslims, not fellow Europeans, things could get unimaginably ugly very quickly,” which could trigger widespread Muslim uprisings in Europe.

Switzerland, however, stands in stark opposition to the multicultural policies and thinking now common in other European nations. In 2009, Switzerland passed a national referendum banning the construction of Islamic minarets .

And while the global economic crisis has forced several European nations to cut military expenditures, Switzerland has maintained relatively consistent levels of defense spending.

Qatar Emiri Air Force selects PC-21 Training System

Pilatus Aircraft Ltd is proud to announce that the Qatar Emiri Air Force (QEAF) has awarded a contract to Pilatus for the procurement of a complete PC-21 Training System, consisting of a fleet of 24 PC-21 trainer aircraft, a suite of Ground Based Training System assets and an extensive logistics support and maintenance package.

The QEAF selected the PC-21 as their fixed wing basic and advanced training aircraft, after a thorough evaluation both in Switzerland and in Qatar. The PC-21 was deemed to be the very best aircraft and Training System of all options available on the market today. The PC-21 will support the training of their young aviators in the newly established Air Force Academy in Qatar. The QEAF Air Academy will receive their first aircraft in the middle of 2014 and training will start mid-2015. Operations will be directly supported by Pilatus under a long-term performance based support contract.

With the Qatar Emiri Air Force, Pilatus has added yet another new customer to the fold and we are delighted to welcome them to the growing ranks of world class Air Forces operating our platforms. We are also honoured by the trust placed in us to support the QEAF in their ambitious venture through this contract award.

We look forward to successfully developing this partnership and we will deliver and support the best basic and advanced training aircraft in the world – the Pilatus PC-21.

Swiss query suspect in "Karachi Affair"

GENEVA: A key suspect in the French illegal political funding scandal known as the “Karachi Affair” has been questioned by investigators in Geneva, Swiss prosecutors said Monday.

Abdulrahman el-Assir, a Lebanese-born businessman subject to a French arrest warrant issued last November, was questioned on May 30 but was not placed in detention, a spokeswoman for the prosecutor’s office said.

There are no extradition proceedings under way, she added.

The “Karachi Affair”, as it is dubbed in the French media, is a complex probe into alleged kickbacks on arms deals.

Investigators are looking into irregularities in the financing of Edouard Balladur’s 1995 presidential campaign. Ex-president Nicolas Sarkozy was then-prime minister Balladur’s campaign spokesman and budget minister at the time.

Judges suspect Balladur’s campaign of receiving illicit “retro-commissions” from the sale of French submarines to Pakistan. Two Sarkozy political aides and a former minister are under formal investigation over the affair.

Assir, who is also wanted for questioning in Spain in a money laundering investigation, is a former associate of Franco-Lebanese businessman Ziad Takieddine, who has already been charged with graft in the investigation.

French investigators raided Assir’s Paris apartment several months ago but found it empty.

The suspect may soon be questioned in Switzerland by a French judge, according to legal sources.

Judges are also probing claims that a 2002 bombing in Karachi that killed 11 French naval engineers was carried out by Pakistani agents in revenge for the cancellation of bribes secretly promised to officials.

The payment of arms sales commissions was legal in France until 2000, but the payment of kickbacks back to France was and is illegal.

The probe focuses on the 1994 sale of submarines to Pakistan and frigates to Saudi Arabia, in which Assir and Takieddine are believed to have acted as middlemen.

Sarkozy loses his presidential immunity a month after leaving office on May 15 and could be called in for questioning, either as a witness or potentially as a suspect, in the case.

He has repeatedly denied any wrongdoing.

Swiss delay Gripen jet delivery to limit costs

Switzerland will postpone delivery of 22 Gripen jets from Saab by about two years so it can co-ordinate its purchase with a larger deal from Sweden and possibly save on costs, the government said on Thursday.

"We hope... to realise certain synergies in the production and development of the programme," Defence Minister Ueli Maurer said at a news conference.

The Swiss government said it would be advantageous to co-ordinate its acquisition with Sweden's expected purchase of between 60 and 80 planes. The bill for Switzerland's 22 new Gripens would remain below 3.126 billion Swiss francs ($3.43 billion), it said.

Switzerland has wrangled for three years over how to replace its aged Northrop F-5E/F Tiger fighters, purchased in 1976 and 1981. In November the government opted to buy 22 JAS-39 Gripens for a price tag of 3.1 billion Swiss francs ($3.4 bln).

But the purchase of the warplanes has proved controversial, as it will require spending cuts in other areas, such as education and agriculture.

Sweden's parliament is expected to vote on its jet purchase in September, and the Swiss parliament has the Gripen purchase on its agenda for October, a spokeswoman for the Swiss defence ministry said.

The two countries were still in negotiations and further details still had to be ironed out, she also said.