The Weekly Wire: Week of 5/29/2015
Russia acknowledged this past week that it would not be taking control of the Mistral-class helicopter carriers which it had so doggedly pursued through the wake of the Ukrainian crisis. While Russia claims it will build its own replacements – an expensive proposition for a budget already burdened by the prospect of an economic recession – the French are left with two vessels built to Russian specifications that they neither want nor need, and with no immediate buyer to absorb the costs. At approximately $650m per ship, the Mistral-class is a prohibitively expensive proposition to all but a few buyers, and though the international community has suggested that France could keep the ships or sell them to NATO, there is no clear path forward. Outside of the significant fiscal ramifications, the political fallout has soured relations between the two countries and will likely shrink the probability of future sales for years to come.
On May 26 the Indian Ministry of Defense cleared a $3.1 billion purchase of 15 Chinook 47F and 22 AH-46E Apache helicopters from Boeing. The green light comes following a March 31 agreement between the Indian MoD and Boeing to extend the deadline for a final deal on the platforms to June 30. The extension is reportedly the ninth occasion on which Boeing agreed to keep the deal alive at the aforementioned price point. The Indian Air Force (IAF) first agreed to acquire the 22 Apache AH-64E helicopters in October 2012, but have not yet come to a formal contract agreement in nearly three years. As has often been the case in India, there is no guarantee that MoD “clearance” leads to a purchase. India’s stated requirement for military helicopters stands at over 400 units. Four separate competitions – along with the Chinook and Apache deals and an indigenous rotorcraft development project—have stalled despite a growing capability gap across all services. Avascent anticipates that this gap will not be fully addressed over its ten-year forecast window, given India’s history of procurement delays and failed acquisitions in the past.