The Weekly Wire: For Your Situational Awareness 8.30.19

 In Weekly Wire

A Busy Week For The Indian Air Force Fuels Speculation

For years, analysts and defense contractors have been skeptically watching the Indian Air Force (IAF) as the service inched closer toward waves of mass fighter retirements in the 2020s. Major international procurements were downsized, cancelled, and beset by scandals. Modernization programs stalled. The hope of the indigenous Tejas fighter has been delayed by the robust IAF testing community. However, the past few weeks have brought to light the potential that things may be changing as India is finally forced to confront its diminishing air force while its rivals pump billions into fighter development.

The first news to emerge, and an item that was covered in a previous Weekly Wire, was that India and Russia were discussing the purchase of 18 additional Su-30MKIs production kits and over 20 refurbished MiG-29s. On its own, this was not a surprising announcement; the HAL Su-30MKI final assembly line is approaching its sunset and would require additional kits in order to avoid closure and maintain jobs. Meanwhile, the MiG-29 sale both reinforced the IAF ahead of impending MiG-21 retirements and allowed Russia to take advantage of new sanction avoidance tactics to augment its capital reserves. However, it was also representative of an Indian Air Force that, under the stress of oncoming aircraft retirements, has a tendency to fall back on existing acquisition channels and extant programs (particularly after all of the complications that have ensnared the Rafale acquisition).

With pressure ever present in the Indian budget, there was some immediate question as to how the IAF would be able to afford these moves. The answer came less than two weeks later as a pair of major programs came under fire. The first of these was the long-suffering HAL Tejas light fighter production program, where a price cut of over 40% seemed imminent as HAL’s orderbook has evaporated and the platform faces steep price pressure from platforms like the Gripen. It would also save the Indian Government over $2.02 billion. Meanwhile, the IAF also cleared an additional $2.4 billion by canceling the SEPECAT Jaguar Engine Upgrade program that would have procured 280 F125IN engines from Honeywell in order to recapitalize the fleet.

However, the cancellation of the Jaguar Engine Upgrade also signs the death knell for the platform in India starting in the mid-2020s. The aircraft’s engines are already starting to see thrust reductions of 15-30% due to their age, and the approximately 120 remaining aircraft face the impending threat of operational futility. And with that in mind, one country is apparently already trying to take advantage of the situation: France.

Unsurprisingly, there have been a number of rumors emerging out of the G7 summit that France is pitching additional Rafales to India. The current contract for 36 Rafales, the first of which will be delivered in mere days, contained an initial option for an additional 36 aircraft.

Specific details have leaked out about a potential French offer of over 200 Rafales, a potentially gargantuan €30+ billion offer that would provide 114 Rafales to replace aging Jaguars, 57 Rafale carrier variants, and 40 Rafales to replace the Mirage 2000 in a nuclear-strike role. While merely rumors during the G7 summit, they do offer some details about what a future fighter sale might entail. The offer would supposedly feature deliveries beginning in 2022, with final assembly taking place in a plant jointly operated by India and Dassault. However, the more notable prize for India would be the promise of 75% indigenization of their Rafales by the time the 150th fighter was delivered around 2030.

While these remain rumors or targeted leaks, it is quite possible that these details were released as a public relations tactic by the French delegation in order to bias any requirements and offset setting organizations. Particularly after the furious debate over the Rafale’s cost reached the level of a near-scandal, these leaks have already primed expectations for other offers regardless of whether this potential mega-deal comes to fruition.


On August 26, Saab successfully completed a test flight for Brazil’s Gripen E fighter. Brazil is acquiring a total of 36 fighters from Saab worth $5 billion, with the first aircraft expected to be delivered beginning in 2021. Brazil’s Embraer is collaborating with Saab on the Gripen E/F fighters, with Saab building the first 13 fighters in Sweden and the rest being built jointly with a final assembly of the aircraft in Brazil. A focus of Brazil’s fighter acquisition when it was first announced in 2016 was the offset requirements designed to benefit the Brazilian aerospace industry. Under the Gripen Design and Development initiative set up between the two countries, Saab is assisting the Brazilian aerospace industry by providing training in Brazil and Sweden, technology transfers, and R&D programs in addition to building the aircraft in Brazil. Saab is expected to begin delivering the new Gripen fighters to Sweden this year and will begin delivering the fighters to Brazil two years later.


On August 22, Portugal signed a contract to finalize the purchase of five of Embraer’s KC-390 multi-mission aircraft, although they had approved the acquisition in July 2019. The sale is valued at approximately $917 million and includes support services and a simulator. Portugal selected the KC-390 in part because its maintenance costs are relatively low, and partially because it can perform several different missions, including troop transport, cargo transport, humanitarian support, and search and rescue. Deliveries are expected to begin in 2023.


The past week has seen a lot of activity for the Philippine Navy. South Korean firm Hanwha Systems Co., Ltd. won a contract worth $24.9 million to upgrade the Navy’s Del Pilar-class frigates. The ships are former US Coast Guard Hamilton-class cutters and are currently used as offshore patrol vessels. These upgrades will enhance the ships’ combat management systems, electronic support measures, and sonar, allowing it to better operate with the more modern ships the Philippine Navy is expecting in the future, such as the Jose Rizal-class frigates being built by Hyundai Heavy Industries.

On August 23, South Korea offered to finance the Navy’s Corvette Acquisition Project (CAP). The financing offer will allow the Philippines to pay off the two corvettes over five to ten years. The CAP’s budget is currently between $535 and $574 million. Although a contract has not yet been signed, the Philippine Navy has recommended a Hyundai Heavy Industries design to ensure interoperability. Although Philippine requirements for the corvette call for a vessel similar in size to the Jose Rizal-class frigates, the corvette is expected to be more heavily armed and may have more advanced sensors.

Lastly, on August 26, Defense Secretary Delfin Lorenzana announced that an offshore patrol vessel (OPV) acquisition would be performed through a government-to-government approach that would take advantage of Australian government financing. Australian firm Austal is offering six units of a larger variant of the Cape-class patrol vessel. The OPV acquisition’s budget has been set at over $573 million. While the final contract may not reach the full budgeted amount, if the six OPV’s cost anything close to the maximum approved budget, the Philippines would be paying much more for the Cape-class than previous customers. Australia acquired eight ships for around $330 million, while Trinidad and Tobago signed a contract this month for two vessels worth $85.2 million.

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