FAB JAS-39E
(click to view full)
As Brazil started boosting its defense budgets in past years, its Navy and Army received funds to replace broken-down equipment, while new fighters will be a critical centerpiece of the Forca Aerea Brasileira’s (FAB) efforts.
Boeing’s F/A-18 E/F Super Hornet, France’s Dassault’s Rafale, Saab’s JAS-39 Gripen NG were picked as finalists. But after repeated stalling, for years the question was whether Brazil would actually place an order, or fold up the competition like the ill-fated 2011 F-X process. At the end of 2013, Brazil unexpectedly picked the Swedish offer, thanks to its offsets, price, and lack of diplomatic baggage. An initial contract is now in place, and this Spotlight article takes you through the competition, choices, and ongoing developments in a country that seems likely to become the world’s largest Gripen fleet.
F-X2: The Competition
Upgraded F-5EM
(click to view full)
The 36+ aircraft under consideration for F-X2 were mostly the same set of 4+ generation fighters that were considered for the canceled F-X competition: Boeing’s F/A-18 E/F Super Hornet, Dassault’s Rafale, EADS’ Eurofighter, Lockheed Martin’s F-16 Block 60, Saab’s JAS-39 Gripen NG, and Sukhoi’s SU-35.
The FAB was also said to be interested in the Lockheed-Martin F-35, but the finalized nature of the Lighting’s industrial production partnership program was likely to keep the program from delivering the industrial offsets Brazil seeks. Meanwhile, a pair of competitors from earlier rounds faded out. Dassault’s Mirage 2000 production line was closing, and Brazil did not mention the F-16 as a contender – or advance Lockheed Martin’s F-16BR Block 70 offer to the finals.
Reporter Tania Monteiro of the Brazilian newspaper O Estado de Sao Paulo writes that technology transfer will be an essential part of any deal, and quotes influential Workers’ Party Deputy (PT is Lula’s party, Deputy = MP or Congressman) Jose Genoino as saying:
“France is always the better partner. Concerning Russia, everyone knows the difficulties and we don’t know what is going to happen in ten years so that we will be able to guarantee our spare parts. The USA, traditionally, does not transfer technology… We want to seek the lowest price with the most technology transfer.”
That offers France an opportunity to get some export momentum and success behind its Rafale, which has lost every competition it has entered thus far (Morocco, Netherlands, Norway, Saudi Arabia, Singapore, South Korea, UAE, et. al.). According to reports, the indications are that technology transfer will be more important than cost in terms of the final choice. Defence minister Nelson Jobim:
“Whatever the final contract it must be closely linked to national development, to help advance in the creation of a strong defense industry and therefore the technological edge we are requesting.”
In December 2013, Brazil came to the conclusion that Sweden’s JAS-39E/F Gripen was their best choice. A contract for 36 aircraft was signed in October 2014, and Brazil’s air force (FAB) has confirmed that their eventual goal is 108 fighters in 3 tranches. Another 24 aircraft could end up serving in Brazil’s navy, as carrier-borne fighters.
Analysis: F-X2 Competitors
The F-X2 finalists were Saab’s JAS-39 Gripen, France’s Rafale, and Boeing’s F/A-18E/F Super Hornet. Beyond the air force, the Marinha do Brazil eventually intends to buy 24 fighters of its own, to operate from the carrier that replaces NAe Sao Paulo beginning in 2025. They watched the competition closely, and would prefer to buy the same aircraft.
Saab JAS-39 Gripen NG (Winner)
Gripen features
Pros: The JAS-39 Gripen Next Generation program offered key industrial opportunities, along with a high-performance fighter whose price and operating costs are both low. Gripen is likely to be Brazil’s cheapest option over its service life; indeed, it could save its full contracted cost of acquisition and maintenance, relative to a Rafale offer that was reportedly twice as expensive.
Saab offers strong industrial partnerships, and has a record of successful technology transfer agreements. For starters, Brazilian industry would be involved in fighter design stage, not just construction. Beyond late-stage development of the JAS-39F, Brazil is the likely launch customer for a naval Sea Gripen, which could add considerable local design work under a future contract. On a very concrete level, the JAS-39BR’s avionics suite will be sourced entirely from Elbit’s Brazilian subsidiary AEL, giving it commonalities with the FAB’s other fighters.
A 2nd factor involves shared integration source codes, allowing Brazil’s growing arms industry to quickly add the weapons they’re developing for use by the FAB – or indeed, for any Gripen customer. Brazilian Gripens offered immediate integration with the cooperative A-Darter air-air missile that Brazil is developing with fellow Gripen customer South Africa, and deploying on its own modernized A-1M AMX fighters. Mectron’s MAR-1 anti-radiation missile is another example that will debut with Brazil’s Gripen NGs.
Grey Areas: The developmental nature of the JAS-39E/F, which won’t be ready before 2018, was both a plus and a minus for Saab. It’s a minus from the standpoint of technical and delivery risk, especially with the FAB expecting delivery by December 2018. On the other hand, as noted above, it’s a strength from an industrial perspective.
The plane’s radar offers the same kind of duality. The JAS-39 NG includes the Raven AESA radar developed with Selex Galileo, whose long history with Brazil’s FAB includes the F-5BR (Grifo-F) and AMX (Scipio) fighter programs. The Raven is an unusual combination of an AESA radar that can be mechanically pivoted, offering more points of failure, but widening the radar’s scanning cone versus other competitors. That’s a strong plus, but the Raven is less mature than the AESA radars equipping the Super Hornet and Rafale.
The last gray area was the twin-engine issue. The F414 engine that Gripen shares with the Super Hornet offers the advantage of well-tested performance and a long-term customer base. The bad news is that if it fails, you will lose that plane. Brazil combines vast over-water areas and even vaster wilderness areas to patrol, a combination that often translates into a focus on range and 2-engine safety. The other 2 Brazilian finalists were both 2-engine planes, but it’s worth noting that most of Brazil’s other fighters (A-29 Super Tucano, AMX, Mirage 2000) have just one engine.
Gripen NG Demo
(click to view full)
Weaknesses: Saab’s biggest handicap was the industrial and geopolitical weight of its rivals from France & the USA. As the competition unfolded, the NSA’s all-encompassing spying turned the USA’s strength into a weakness, destroying the Super Hornet’s prospects. That created some blowback for Saab as well, however, since their fighter relies on GE F414 engine. That means the Gripen NG partnership of Sweden, Switzerland, and Brazil will be forced to abide by American ITAR rules for export sales, and must live with the understanding that American sanctions could cripple their fighter fleets. Brazil already lives with this for its front-line F-5 fighters, and they decided they could live with it here, too.
Another handicap involves Gripen’s lack of a naval variant, or even a flying prototype of same, in a competition where both of its competitors are naval fighters, and the customer operates a carrier. Conversion of land-based aircraft for naval aviation is often unrealistic, but Sweden’s insistence on short take-off and landing performance from surfaces like highways gives Gripen a strong base to work from. Saab began serious work on a “Sea Gripen” in March 2011, and can offer Brazilian industry the unique opportunity to be involved in developing the modified aircraft in time for 2025. It’s still a weakness, but it’s a weakness with a hook that may have been attractive.
JAS-39BR industrial
(click to view full)
Offer: The JAS-39NG reportedly ranked 1st in the FAB’s technical trials, had strong support from Brazilian aerospace firms, and offered a complete package worth about $6 billion (about 10 billion Reals), of which $1.5 billion was for maintenance. Saab even began working with a number of Brazilian firms in advance of any contracts, discussing sub-contracting possibilities, and working to improve their industrial proficiency with key technologies like advanced composite materials. That finally paid off in a 36-plane order that secured the Griipen NG’s future.
Dassault’s Rafale F3R
FAB Rafale-B concept
(click to view full)
Pros: The Rafale had a lot of advantages in this competition. It’s a twin-engine fighter with good range and ordnance capacity, advanced weapons and add-ons, and much better aerial performance than the F/A-18 Super Hornet. It can play the carrier-compatible card very well, since the NAe Sao Paulo was once FS Foch, and Brazil’s next carrier may well be a variant of DCNS’ PA2 design.
It also comes from a trusted supplier. France is seen as a good supplier who avoids political interference and makes good on technology transfers, and the FAb’s experience with the Mirage 2000 offers a common technological and training base. Brazil was already embarked upon a broad set of major defense projects with French firms, and President Lula’s administration clearly favored the Rafale as part of that relationship.
Dassault Rafale:
Takeoff at last?
(click to view full)
Grey Areas: The Rafale would have confined Brazil to French weapons and sensors, unless Brazil spent its own money to add some locally-developed ordnance. On the other hand, Brazil has bought multiple versions of French Mirage aircraft during the FAB’s history, and seems unfazed by that requirement. Offers to partner in expanding the Rafale’s options might serve to hit 2 targets at once, by allaying concerns and playing the tech transfer card more strongly.
The Rafale’s January 2012 pick as India’s preferred fighter softened the type’s biggest negative, but India hadn’t signed a contract yet, and still hadn’t by the time Brazil signed its Gripen deal in October 2014. The Rafale was the only plane in this competition without an existing export customer, and it has lost a lot of international competitions.
Finally, Thales new RBE2-AA AESA radar was a bit of a greay area. It has been installed in French Air Force fighters, so it’s mature by the barest of margins. Unlike the Super Hornet’s APG-79, however, it hadn’t been used much in operations, and had no combat record.
Weaknesses: The Rafale’s biggest performance weakness is its lack of a Helmet Mounted Display, which keeps it from reaching its full potential in close-range air combat. Its biggest contest weakness was its price.
Offer: Subsequent events would bear out both the Rafale’s strengths, and its weaknesses. Folha de Sao Paolo reports that it was the most expensive of the 3 finalists, with a price tag of about $8.2 billion US dollars (13.3 billion Reals), plus $4 billion in maintenance contracts over the next 30 years. Dassault reportedly offered the best technology transfer package, and Defence Minister Jobim claims a subsequent $2 billion price reduction, but details remain unclear. The plane remained a strong contender, but a deteriorating economy and a binary choice involving Saab’s Gripen created the perfect storm that crashed the Rafale’s chances.
F/A-18E/F Super Hornet
F/A-18E, Parked
(click to view full)
Pros: The carrier-compatible Super Hornet’s biggest advantage was a huge user base and wide array of ordnance, with guaranteed future funding for upgrades that Brazil won’t have to invest in. The Advanced Super Hornet, with conformal tanks, internal IRST, and improved electronics, is an early example of that dynamic at work. The Block II’s combat-proven AN/APG-79 AESA radar offers Brazil an attractive technology, volume production lets Boeing start at a price that’s comparable to the single-engine JAS-39’s, a weaker American dollar makes American exports even more affordable, and the potential to turn these planes into EA-18 electronic jamming fighters is a unique selling point for the type.
On the industrial front, Boeing’s passenger aircraft division gives them an attractive magnet for industrial offsets, and in April and June 2012, Boeing strengthened its position by signing a broad cooperation deal with Embraer. Their offering will use wide-screen displays and some other avionics from Elbit’s Brazilian subsidiary AEL.
Grey Areas: The Super Hornet is an American jet, and the vast majority of its equipment and weapons are also American. The USA’s influence in Latin America can help their lobbying, but their image in Latin America can hurt them at the same time. It was always true that a great deal would depend on what kind of relationship Brazil has with Washington around the time the decision is made, and where Brazil wanted that relationship to go. That dynamic began as a positive inducement to buy from Boeing, but ultimately became a fatal weakness.
Concerns about America’s propensity to use arms export bans as a political lever adds another complication to the Super Hornet’s odds, and take away some of the advantage created by its broad arsenal of American weapons and sensors. Sen. McCain reportedly pledged to get a Congressional commitment that the US Congress would not block the sale or transfer of technologies, but that cannot be binding, which left the issue of future spare parts interference etc. as an open question.
A related grey area for the Super Hornet is technology transfer and customization. Exactly how much technology Boeing and the US government were willing to transfer wasn’t clear, though they promised that their offer was competitive. Source code transfer is a related point, and it affects the ease with which Brazil will be able to add its own equipment if the Super Hornet is chosen. Traditionally, the USA doesn’t offer that.
F/A-18E International
(click to view full)
Weaknesses: The Super Hornet offers poorer aerodynamic performance than other competitors, falling behind in areas like maneuverability, acceleration, sustained Gs, etc.
What really hammered the Super Hornet, however, was the public revelation that the American NSA had been spying on Brazil’s government and Presidential Office. A 2013 negotiation that was supposedly tipping toward the Super Hornet died, and almost took the entire F-X2 competition with it. Instead, the Super Hornet was the only casualty, creating a binary decision between Saab and Dassault.
Offer: After being the long-shot finalist for most of this competition, heavy lobbying by the US government and Boeing put the Super Hornet back in the running – for a while. Folha de Sao Paolo reports that Boeing’s package was worth $7.7 billion dollars (about 12.9 billion reals), of which $1.9 billion was for maintenance. Rousseff reportedly pressed Boeing to improve its industrial participation offer, and Boeing’s subsequent deals with Embraer were significant. The firm just couldn’t fight its competitors and its own government at the same time.
Non-finalists
RAF Typhoon & ASRAAM
(click to view full)
Eurofighter Typhoon (EADS/European): Technology transfer may have been an issue, but price was always the biggest stumbling block. Eurofighters consistently sell for $110-130+ million, which doesn’t fit a goal of $2.2 billion for 36 planes. The most capable air-air choice in the group would provide unquestioned regional air superiority, but ground surveillance and strike performance was still provisional (Tranche 1 v6), or unproven (Tranche 2+). This has been fatal in competitions like Singapore’s, and may have been a handicap here.
On the plus side, EADS Airbus offered a potent option for industrial offsets, and other EADS subsidiaries had footholds of their own. EADS Eurocopter’s Cougar had just become the medium-lift mainstay of Brazil’s future helicopter fleet, for instance. It wasn’t enough.
X-35B STOVL
(click for landing)
F-35 Lightning II/ F-16BR (Lockheed Martin) The F-35 would have offered a clear set of performance benefits over competing aircraft. No aircraft in this group could have matched the Lightning’s advanced surveillance capabilities, and surveillance is a big need in Brazil. The F-35B STOVL variant also offered Brazil the ability to operate from small, dispersed runways, and it would have been perfect for aircraft carriers like the Sao Paulo. Unfortunately, technology transfer issues weren’t the F-35’s only problem. Other barriers to an F-35 win included limited opportunities in its industrial structure, questions surrounding air superiority performance, the low likelihood of deliveries before 2016 (a concern that was more than vindicated by events), a single engine design – and the potential cancellation of the F-35B variant, which would be most useful to Brazil.
Instead, Lockheed Martin offered Brazil an F-16BR. It was expected to resemble the F-16E/F “Block 70″ variant offered to India, with an AESA radar and built-in IRST/targeting sensors, an uprated engine, etc. Both India and Brazil are fond of Israeli avionics and weapons, and Lockheed Martin also has a long history of including those items for Israel and for other customers.
The F-16BR offer shared many of the Super Hornet’s perceived benefits and drawbacks: AESA radar and sensors, a weaker American dollar, and wide compatibility with other regional and global air forceson the plus side. On the minus side, it offers poorer aerodynamic performance, distrust of America is a barrier, the F-16 cannot play the carrier-compatible card like the Super Hornet, and it offers only a single-engine design.
SU-35
(click to view full)
SU-35 (Sukhoi/ Rosoboronexport) This was the aircraft Russia offered in Brazil’s initial F-X competition, and the design has matured into a production aircraft since then. Russian tech transfer is trusted. Lack of political interference is trusted absolutely. The aircraft itself would offer an option that’s better than Venezuela’s SU-30MKs, while still presenting itself to the region as an equivalency move. The price would be good. Unsurprisingly, Sukhoi had some support in the FAB.
On the other hand, service and parts delivery were almost guaranteed to be bad. That gave the FAB real pause. One way around that might be to offer licensed local production. In order to solve the Russian service problem[1], that production would also have to extend to the aircraft’s NPO Saturn engines and fitted avionics. That’s a tall but achievable order, but in the end, it didn’t matter. The SU-35S wasn’t a finalist. Sukhoi reportedly made an unsolicited offer anyway, but it didn’t go anywhere.
Contracts and Key Events
2014-2015
Preliminary agreements followed by a contract for 36; Final FAB goal is 108; Lease discussions for 10 planes; Argentina may want 24, but Britain blocks that.
Gripen NG
April 14/15: Brazilian prosecutors will investigate the country’s $5.4 billion Gripen deal. The probe is reportedly focused on a $900 million disparity between Saab’s 2009 bid price and the final contract value. Saab beat out competitors Boeing and Dassault in the FX-2 competition, which should see the initial batch of 36 fighters delivered in 2018.
Nov 18/14: 108. Flightglobal quotes “a leading Brazilian air force figure” who confirms that the FAB’s stated requirement from their 2007 feasibility study is 108 JAS-39E/F fighters, to be bought in 3 tranches – presumably, 36 planes per tranche.
The initial F-X2 order for 36 will reportedly see 15 jets (likely all 8 JAS-39Fs, and 7 JAS-39Es) assembled in Brazil. The next 2 tranches after this one will feature even more Brazilian involvement, and would replace Brazil’s newly-upgraded F-5M/FM and AMX-1M fighters. Meanwhile, weapon integration plans are underway. Their source confirmed that the jointly-developed A-Darter short range air-to-air missile is about to receive its final qualification, clearing it for immediate use on Brazil’s JAS-39C/D interim force in 2016 (q.v. March 3/14) as well as its JAS-39E/Fs. Mectron’s MAR-1 radar-killer missile will also be integrated on Brazil’s JAS-39E/Fs when they enter service in 2019.
What hasn’t been finalized yet is the model mix between JAS-39Es and the 2-seat JAS-39Fs over all 3 tranches. It’s interesting to hear that they’re talking to the US Navy about this, but the USN is a very accessible partner who has the same issue in their F/A-18E/F Super Hornet fleet. The South African Air Force has also been chatted up on the topic, though they probably aren’t a great example. Sources: Flightglobal, “Brazilian air force confirms Gripen acquisition numbers”.
Nov 9/14: Argentina. Argentina may want to do a deal with Brazil (q.v. Oct 22/14), but Britain has now publicly said “no.” To be more precise, they reiterate the continued existence of a ban. A spokesperson for the UK Department of Business, Innovation and Skills:
“We are determined to ensure that no British-licensable exports or trade have the potential to be used by Argentina to impose an economic blockade on the Falkland Islanders or inhibit their legitimate rights to develop their own economy…”
About 30% of the JAS-39E/F will be British, from the ejection seats to the radar, landing gear, and a number of electronic systems. Embraer could try to downgrade and substitute, but Argentina lacks the money to finance such an ambitious effort. Now add the fact that a newly-Republican US Senate and House would block export’s of GE’s F414 engines. As knowledgeable observers expected, Argentina will have to look elsewhere. C4ISR & Networks, “Argentina Buying Gripens? Brits Say ‘No Way'”.
Oct 24/14: Brazil. Saab signs a SEK 39.3 billion / BRL 13.363 billion / $5.475 billion contract with Brazil’s COMAER for 28 JAS-39E and 8 JAS-39F fighters, alongside provisions for training, initial spares, and a 10-year Industrial Co-operation contract to transfer technologies to Brazilian industry. Embraer will have a leading role as Saab’s strategic partner, with a JAS-39F co-development role and full responsibility for production.
This contract winds up having wider implications as well, by securing Sweden’s order for 60 JAS-39Es. As signed, it required at least 1 other customer, which was going to be Switzerland until a weak effort from that government destroyed the deal in a referendum. Brazil has now become that additional customer, and Saab expects that this commitment will keep the JAS-39 in service to 2050.
What’s left? Brazil’s FAB confirms that the interim lease agreement for 10-12 JAS-39C/Ds will be a separate deal with the Swedish government. Meanwhile, the JAS-39NG contracts still require certain conditions before they become final, such as required export control-related authorizations from the USA et. al. All of these conditions are expected to be fulfilled during the first half of 2015, with deliveries to take place from 2019 – 2024. Sources: Saab, “Saab and Brazil sign contract for Gripen NG” | Brazil FAB, “Brasil assina contrato para aquisicao de 36 cacas Gripen NG”.
Contract for 36 Gripen NG
Oct 22/14: Gripen NG. During the Embraer KC-390 medium jet transport’s rollout, Argentina and Brazil sign a formal “Alianca Estrategica em Industria Aeronautica.” Argentina is already making parts for the KC-390, and they need a larger partner for a number of other reasons. The FAB’s releases add that Argentina is also thinking of buying JAS-39E/F Gripens from Embraer, whose Brazilian factory will assemble at least 36 of the advanced Swedish fighters under the pending F-X2 program:
“El Gobierno nacional decidio iniciar una negociacion con la administracion de Dilma Rousseff para la adquisicion de 24 aviones Saab Gripen dentro del programa denominado FX 2…”
Regional export rights are also expected to be part of the deal. That could get interesting, because the Gripen has systems from the USA and Britain in it. You might be able to replace electronics, but it’s expensive – and ejection seats and engines are a lot tougher. Sources: FAB NOTIMP, “Argentina quiere comprar 24 cazas supersonicos”.
July 11/14: Industrial. There’s no agreement yet for the Gripen lease, but Saab and Embraer have signed the expected Memorandum of Understanding around JAS-39E/F production. Embraer will be the Brazilian industrial lead, performing its own assigned work while managing all local sub-contractors in the program. They’ll also work with Saab on systems development, integration, flight tests, final assembly and deliveries, with full joint responsibility for the 2-seat JAS-39F Gripen NG. Sources: Embraer and Saab, “Embraer to partner with Saab in joint programme management for Brazil´s F-X2 Project”.
March 3/14: Gripen lease. Brazil will lease 10 JAS-39C/D Gripens as interim fighters from 2016 – 2018, with the 1st batch of 6 arriving in time to fly over the Rio Olympics. The agreement also includes training, and a pair of Brazilian pilots will begins conversion training in May 2015. The JAS-39E/F fighters that follow will have some important differences, but they’ll also have many important similarities, so the lease will serve double duty as an early familiarization period.
The contract is still being negotiated, but the basic premise is that Sweden will loan the fighters, and Brazil will pay operating costs. Defining what that means will still be a bit of work, of course. Does that cover depreciation during flying hours? What maintenance is required? What happens if things break? Et cetera. They’re hoping for a full agreement by May 2014. Spurces: Politica, “Brasil e Suecia discutem emprestimo de cacas Gripen”.
March 3/14: Agreements. Brazil and Saab sign advance agreements on defense cooperation, which lay the foundation for the future Gripen contract. This includes a defense cooperation framework agreement, whose scope is already wider than just fighters, and a corollary agreement that commits to appropriate levels of secrecy and security procedures within that cooperation framework. The new agreements build on documents signed in 1997 and 2000, and both will be forwarded to Brazil’s National Congress for approval.
The industrial goal is to be able to produce 80% of the plane in Brazil, which has future implications given that final Brazilian orders over time are estimated at 60 – 104 fighters. Equally significant, the accompanying security agreements include access to the Gripen’s source code. That will allow Brazil to add its own weapons to the new fighters, increasing the global attractiveness of both Saab’s Gripens and of Brazil’s weapons. A current wave of Latin American upgrades could create timing issues for wider regional sales, but export partnership arrangements are under discussion, and currently revolve around Latin America and developing nations with close Brazilian ties (“das nacoes em desenvolvimento com as quais o Brasil possui estreita relacao bilateral”). Sources: Brazil FAB, “Brasil assina acordos de cooperacao e da prosseguimento a compra dos cacas suecos” | See also Defense News, “Fleet Modernization Drives Requirements Across South America”.
Framework and Confidentiality agreements
February 2014: Interview. Saab CEO is interviewed by Brazil’s Veja, and offers some thoughts regarding F-X2. It provides some behind the scenes clarity, but all words are chosen as carefully as one would expect for a process that Bushke himself admits is highly political. The questions are more interesting in some ways, focusing on Brazil’s educational deficit and implicitly asking about corruption. Bushke flatly says that there were never any improper solicitations, and reminds the interviewer that Brazil’s Embraer was good enough to push Saab out of the civil aircraft market. He does say that Lula’s initial Rafale preference was a shock:
“Saab executives and employees felt that the announcement by Brazil’s former president came like a bolt of lightning out of a clear blue sky. It was totally unexpected, given their strong relationship with the Brazilian military staff responsible for making the decision.”
His answer explains its own implicit question: they weren’t the ones making the decision. Finally, Hakan finds that being from Sweden is useful for at least one purpose: being able to slip inside your opponents’ premises when you’re asked to justify military spending. Sources: Veja Magazine, translated by Saab, “Sweden is a model: Interview with Hakan Bushke, CEO of Saab”.
Feb 4/14: JAS-39F. IHS Janes reports that Brazil wants both single-seat and two-seat variants, unlike Sweden or Switzerland:
“Saab has confirmed to IHS Jane’s that Brazil’s aerospace industry will be given the opportunity to develop a two-seater version of the Gripen NG as part of the USD4.5 million consignment of 36 fighter aircraft…. Out of the 36 fighter jets under the FAB F-X2 programme, eight of the aircraft will be twin-seat Gripen Fs and the rest [DID: 28] will be in the single-seat Gripen Es.”
That would increase Brazil’s workshare, and give them a solid design role, but it also increases costs. Negotiations will be interesting. The other question involves weapons. The JAS-39D eliminates the 27mm cannon found in the JAS-39C, and it remains to be seen whether the JAS-39F will follow the same pattern. Sources: IHS Jane’s 360, “Saab confirms twin-seat Gripen F development for Brazil”.
2013
NSA spying sinks US chances, costs sink Rafale, Gripen wins!; Gripen would use AEL avionics suite; Sukhoi’s unsolicited offer; Boeing deepens Embraer ties.
Sea Gripen Concept
(click to view full)
Dec 18/13: Tack sa mycket, Herr Snowden! Earlier press reports that the competition was stalled for another 2 years are proven wrong by a somewhat unexpected announcement from the Ministerio da Defesa: Brazil has picked Saab’s Gripen-NG as their preferred bidder, and expects to buy 36 planes for $4.5 billion. That’s currently just an estimate, as negotiations need to sort themselves out. A final contract and financial arrangements are expected in December 2014, and deliveries are expected to begin 4 years later. That’s a challenge for Saab, as any schedule slippage in the JAS-39E/F development program would create a late delivery. Late fees can be expected to be a negotiating point, and Brazil’s MdD says that leasing JAS-39C/D Gripens as an interim force may be addressed as a separate contract.
The Gripen NG contract figure tracks exactly with previous reports by Folha de Sao Paolo, which means an additional $1.5 billion contract can be expected for long-term maintenance and support. Saab was the cheapest of the reported offers, beating Boeing ($5.8 billion) and Dassault ($8.2 billion, reportedly reduced) by significant margins. Once Edward Snowden’s revelations of NSA spying on Brazil’s government killed Boeing’s chances, there was no middle ground. The Rafale’s reported $10.2 billion purchase + maintenance total made it 70% more expensive than Saab’s Gripen. Brazil’s economic slowdown, and the Rousseff government’s focus on entitlement spending, made that cost chasm a big factor.
It wasn’t the only factor. The Gripen has Ministry statements indicate that industry’s long-standing preference for Saab’s industrial terms played a role, as Gripen-NG offers the prospect of participating in a new fighter’s design. So, too, did the unique prospect of full access to weapon integration source code, which the Ministry cited in its Q&A. That will allow Brazil to leverage its revived arms industry, and easily add weapons like Mectron’s MAR-1 radar-killer missile. Throw in the option to participate in the future design of a carrier-based Sea Gripen variant to replace ancient A-4 Skyhawks on Brazil’s carrier, and Saab’s industrial combination overcame the Gripen’s reliance on an American engine and other equipment.
The Brazilian Air Force has a dedicated website to explain its choice. Dassault issued a terse statement pointing out the presence of US parts on Gripens, and positioning the Rafale in a different league. Which may or may not be true, but it’s indisputably true that global fighter buys have historically been heavily weighted toward a less-expensive league. Gripen is within that low to mid price range, and Rafale isn’t. Sources: Brazil MdD, “FX-2: Amorim anuncia vencedor de programa para compra de novos cacas” | MdD, “Perguntas & Respostas sobre a definição do Programa F-X2″ (Q&A) | Dassault, “FX2 contest – 2013/12/18″ | Defense Aerospace, “Brazil’s Gamble on Gripen Offsets” Folha de Sao Paulo, “Dilma agradece Hollande por apoio contra espionagem dos EUA”.
Brazil picks Gripen
Sept 26/13: Airpower Brazil (Poder Aero) magazine cites Presidential aides to report that President Dilma Rousseff is about to “defer” the F-X2 decision to 2015, after next year’s general election. Negotiations had reportedly almost resulted in a deal for 36 of Boeing’s F/A-18E/F Super Hornets, but NSA spying on the Presidential Office, which Rousseff decried in the UN, is cited as the motivating force behind this reversal. The decision would be a two-stage problem for Boeing. It’s a problem because the bad feelings may not die down, which hurts their political position. It’s also an industrial problem, because all Super Hornet family production is due to end by mid-2016. Australia’s interest in buying 12 EA-18Gs will probably stretch that to late 2016, but a number of key suppliers will end production much earlier without further export wins, and restarts add costs.
Brazil could have simply picked another contender, but Poder Aero’s report says that technology transfer issues around the Scorpene submarine, and problems transferring production to India, have hurt the Rafale’s chances. Frankly, that doesn’t make a lot of sense. The statements regarding the PROSUB program are difficult to verify, but there are counter-examples likes like the EC725 helicopter project that have gone quite well. As for India’s M-MRCA competition, that’s a poor model. Brazil’s aerospace production capabilities are far more advanced than HAL’s, and many of India’s negotiating problems are self-inflicted policy wounds – like wanting to place financial penalties on Dassault for delays, while giving Dassault no management authority with key suppliers. It all depends on what Rousseff’s briefings are telling her.
As for Saab’s JAS-39E/F Gripen, it’s a legitimate candidate, but Brazil reportedly sees its developmental nature as more of a problem than an opportunity.
With all that said, the real question here may no longer revolve around fighters. It’s whether F-X2 is dead. Brazil is hosting the Olympics in 2016, which will create multiple kinds of interference, and excuses for further delay. Slowdowns in China and elsewhere have to send shivers through a commodity economy like Brazil’s, and it has other defense priorities like naval ships that will require budget space. This in a context of massive social protests against corruption, poor public services, and crumbling infrastructure. Given those kinds of headwinds, one might well ask why a political system that has been unable to buy new fighters for over a decade, and has introduced delay after delay for the last 3 years, will suddenly turn that around in 2015. Source: Poder Aero / Valor Econômico, “Governo deve adiar decisao sobre caças da FAB para 2015″.
Aug 12/13: Brazil – NSA fallout. Reuters reports that revelations of NSA spying may have damaged the Boeing Super Hornet’s chances in Brazil. US Secretary of State John Kerry’s October meeting with Brazilian President Dilma Rousseff won’t discuss the deal, and the unnamed political source was blunt: “We cannot talk about the fighters now… You cannot give such a contract to a country that you do not trust.”
In July, the O Globo newspaper published documents leaked by Edward Snowden that revealed U.S. surveillance of Internet communications in Brazil and other Latin American countries. Nobody who has been paying attention can possibly be surprised, given concerns regarding transnational drug cartels, Brazil’s close relationship with Iran, and the growth of Islamist activities in the “triple border” junction area of Brazil, Argentina, and Paraguay. Brazilian senators may not have been paying attention, or may just have been playing their expected role when they questioned President Rousseff’s visit to Washington in toto.
Brazil could just go ahead and pick another plane, but fighters seem to be dropping down the government’s priority list. Huge protests against corruption and misuse of public money have left the government skittish about big outlays, and another government source tells Reuters that they no longer expect a decision in 2013. With 2014 as an election year, that means 2015 for any fighter decision. The Brazilian government isn’t exactly responding with denials following the Reuters report, and for Boeing, later is better than sooner. Reuters, “Spying scandal sets back U.S. chances for fighter jet sale to Brazil”.
Oooops.
Aug 5/13: Tchau, Mirage. Brazil will retire the FAB’s 12-plane Mirage 2000B/C fleet in December, without a replacement. The people in Brazilia’s glass Supreme Court building will be relieved.
There are conflicting reports as to why they’re being retired. Some cite the Dassault support agreement, which was extended for another 2 years from 2011 – 2013, but ran up against manufacturer recommended service life limits. The cost of the in-depth overhauls would far exceed the $80 million Brazil paid for the used jets, and if Brazil wanted to add modern weapons to keep the planes competitive, the radar and electronics would also need replacement.
Finally, in a tight budget environment, it’s worth noting that other customers have complained about high maintenance costs for this type. Taiwan, for instance, is planning to retire more advanced Mirage 2000-5s by 2020, instead of upgrading or swapping their jets to the 2000-9 configuration. This is so even as they upgrade less advanced F-16A/Bs, and worry about a growing cross-strait imbalance in front-line fighters.
Brazil’s 2005 purchase of the used French fighters didn’t include resale rights, so the fighters will return to France. Due to their age, however, they won’t be resold again. Brazilian reports cite a likely “replacement” of 6-12 F-5Ms at the Anapolis AB near Brazilia, but those are refurbished fighters that were already in FAB stocks. Only F-X2 fighters will act as replacements, if indeed the FAB buys any. Estado de S. Paulo [in Portuguese] | Defense Update.
Mirage 2000s to retire
July 6/13: Delays. Brazil won’t be making their F-X2 decision until the end of the year. They have, of course, asked the contenders to extend their bids yet again. Brazil Defence [unofficial].
June 18/13: Boeing & Embraer. Embraer and Boeing sign an agreement to market Embraer’s KC-390 medium airlifter in limited international venues, building on the June 26/12 MoU. Boeing will be the lead for KC-390 sales, sustainment and training opportunities in the USA, UK and “select Middle East markets.”
Outside the Middle East, that doesn’t actually encompass a lot of meaningful opportunities, but it’s one more factor bolstering Boeing’s F-X-2 bid. Boeing | Embraer.
May 20/13: SU-35, unsolicited. RIA Novosti quotes Rosoboronexport’s SITDEF exhibition lead Sergey Ladigin, who says they’ve offered to deliver Su-35 fighters and Pantsir S1 air defense systems to Brazil outside the framework of a tender, and says the offer is being considered.
Brazil wants the Pantsir short-range air defense gun/missile systems, but the SU-35 failed to make the shortlist in 2009. On the other hand, if you don’t ask, you’ll never get. So Russia’s is throwing in the Su-35 offer, and Ladigin said in Lima that they were “ready to transfer 100% of manufacturing technologies,” as well as some technologies from their T50 (future SU-50?) stealth fighter. Russian Aviation.
MdB test pilot
May 15/13: Sea Gripen. Saab remains serious about its “Sea Gripen NG,” and has been working on the idea since their May 2011 announcement. Brazil’s Navy is expected to buy its own fighters to equip a new aircraft carrier, which is expected to replace NAe Sao Paulo around 2025. They expect their 24 new fighters to be the same type as the FAB’s F-X-2 winner, which leaves Saab competing against 2 proven naval fighters: Boeing’s F/A-18 Super Hornets and Dassault’s Rafale-M.
To help build their case, former Brazilian naval aviator Comte. Romulo “Leftover” Sobral is invited to flight test a JAS-39D, in order to verify the design’s basic suitability for naval conversion. Sobral liked the aircraft’s intuitive flight controls, ground handling, stability at low airspeeds, acceleration response, handling at the high angles of attack used in carrier landings, and good visibility. He even liked the flight suit. The plane landed in 800m, and Comte Sobral believes that the plane does have the basic requirements to become an effective naval fighter. The Sea Gripen’s lack of proven status, and absence of even a flying prototype, will still hurt the JAs-39. On the other hand, the time lag from F-X2 to a naval buy gives Brazilian industry a unique opportunity to participate in designing the Sea Gripen. Saab Gripen Blog | Full article at Defesa Aerea & Naval [in Portuguese].
April 15/13: Rafale. Defense World reports from LAAD 2013 that Dassault’s F-X2 offer will be the Rafale F3R, which includes a major software upgrade that allows the aircraft to take fuller advantage of the new Thales RBE2-AA AESA radar, improves their Thales SPECTRA self-defence systems, adds Mode-5/Mode-S capable Identification Friend or Foe, and allows the Rafale to deploy MBDA’s Meteor long range air-to-air missile.
Given Brazil’s insistence on an AESA radar, Dassault could hardly avoid offering the F3R.
April 10/13: Gripen. Saab executive Eddy de la Motta is quoted as saying that Brazilian JAS-39 Gripen NGs would use AEL’s avionics, creating a forked version under the wider development effort. This will help Saab meet industrial offset obligations, and also create commonality for Brazil’s fighter fleet, but integrating all of those components with the plane’s mission computers, OFP core software, weapons, etc. is not a trivial task. Elbit subsidiary AEL’s avionics are used in many Brazilian aircraft, with the exception of the Mirage 2000s that will retire as F-X2 fighters enter the FAB.
A less comprehensive suite of AEL avionics will also be used in Boeing’s F/A-18 International, which offers AEL’s wide-screen display and some other components to all potential customers. Defense News.
April 3/13: Embraer. Embraer’s CEO Luiz Carlos Aguiar talks to Defense News about F-X2 and other subjects. Regarding the fighters:
“I think [the decision is] going to be in the next months, this year, I would say. Our role in that depends… on who is going to win. We have a memorandum of understanding with all three of the contenders. Each of them offers an offset program, but we prefer not declaring publicly our preference…. Whatever they choose, we’re going to be in the process. They need to make this decision because Brazil needs that…. With the F-X, we can even go further in terms of technology, and even some new products could come up with one of these three contenders. That’s what I can tell you, I can’t go further than that.”
Given Embraer’s dominant position in the Brazilian aerospace industry, it would be shocking if any of the contenders had chosen not to sign industrial partnership MoUs with Embraer. In light of the April and August 2012 agreements, the “new products” comment suggests that Boeing may have replaced Saab (q.v. Sept 28-29/09 entries) as Embraer’s preferred choice. That isn’t at all certain, however – as Aguliar surely intended. Defense News.
March 8/13: More delays. Brazil has asked the 3 F-X2 finalists to extend their bids for another 6 months from the March 30/13 deadline, as the Brazilian commodity economy remains mired in a 2-year slump. Boeing, Dassault, and Saab has hoped for a decision in time for Brazil’s April 2013 LAAD defense expo.
The length of the cumulative delays could create changes for the bids, and it effectively squashes any faint hopes that the new jets would be able to fly in time for the 2014 World Cup. Given required production and training times, those hopes started to become awfully faint by around mid-2012. Reuters.
2012
Rafale wins in India; Boeing trying hard.
Rafale
(click to view full)
Dec 11/12: Still no deadline. In a joint press conference with French President Hollande, Brazil’s President Rousseff remains very non-committal regarding F-X2. On the one hand, the timing will depend on Brazil’s economy, which is commodity based and so subject to the effects of global slowdowns. On the other hand, she says that the government expects enough growth in the coming months to resume the selection process. French President [in French] | YouTube press conference video | Les Echos [in French].
Dec 7/12: Super Hornet. The Brazilian news weekly Istoe publishes an article claiming that the FAB’s formal analysis had preferred Boeing’s F/A-18E/F Super Hornets. The report was shelved by the government, which favored France’s Rafale. The air force’s preference is reportedly due in part to the fact that the Super Hornet has the widest variety of integrated weapons and equipment, and partly because it’s available immediately and could be delivered very quickly. The FAB is reported to be concerned about both the age of its fleet, and its regional competitiveness.
The Super Hornet’s cost was in the middle, at $5.4 billion rather than the Gripen’s $4.3 billion, or Rafale’s $8.2 billion. So, too, were estimated operating costs, at about $10,000 per flight hour vs. $7,000 for Gripen, or $20,000 for the Rafale.
The government’s thinking is still opaque, though Boeing’s technical cooperation agreements with Embraer (vid. April 3-9/12 and June 26/12 entries) add a bit more weight to the industrial side of the equation. Istoe [in Portuguese, and note that their picture is an F-15] | Defense World.
Aug 9/12: Delayed, again. Brazil may need a 5th consecutive extension. Defence Minister Celso Amorim tells Dow Jones that:
“The project is not being abandoned. There will be a decision in the right time. But, today, I would prefer not to give a date… The economic situation has taken a less favorable turn than expected and it naturally requires caution.”
With China’s economy appearing to slow, and the EU debt crisis as an ongoing drag on their economy, a commodity-based economy like Brazil could find itself in tight straits for a while unless something changes. Fox News.
July 7/12: Extension. The FAB has asked the 3 bidders to renew their fighter offers. It’s the 4th consecutive 6-month extension, while Brazil dithers over its choice and the timing of the buy. France24.
June 26/12: Boeing & Embraer. Boeing and Embraer announce an agreement to share some specific technical knowledge regarding the KC-390, and to evaluate markets where they may join their sales efforts for medium-lift military transports. It’s part of a broader agreement signed in April 2012 (vid.), and its immediate significance is limited.
On the other hand, it has the potential to turn Boeing into a medium transport rival to C-130 maker Lockheed Martin, while extending Embraer’s marketing reach to match Lockheed Martin and Airbus. That’s the sort of thing that could change the KC-390’s global prospects, but it’s still too early to tell. Boeing | Embraer.
June 14/12: Boeing & AEL. Boeing picks Elbit Systems and its AEL Sistemas subsidiary to provide a low-profile head-up display (LPHUD), as part of the Advanced Cockpit System for Boeing fighter jets. This follows the March 5/12 pick to supply the ACS’ Large Area Display (LAD) offered as an option for new F/A-18 Super Hornets and F-15s, including the F-15SE Silent Eagle. Boeing.
May 19/12: 2012 decision? Mercopress reports that Rousseff’s government intends to make its F-X2 decision by the end of 2012. That’s a good way to reduce those tiring lobbying meetings.
April 3-9/12: Boeing & Embraer. Boeing announces its new Sao Paulo facility, Boeing Research & Technology-Brazil. It is the firm’s 6th global advanced research center, after Europe, Australia, India, China and Russia. Areas of research focus for the new center will include sustainable aviation biofuels (Brazil is a leading biofuel producer), advanced air traffic management, advanced metals and bio-materials, and support and services technologies.
That announcement is followed by a broad business agreement with Embraer to cooperate in these areas, as well as in commercial aircraft. The broader announcement by Embraer and Boeing was made on the same day as the signing by the Brazilian and United States Governments of a Memorandum of Understanding on the Aviation Partnership, to expand and deepen cooperation between the 2 countries on civil aviation. Boeing re: facility | Boeing re: cooperation.
March 5/12: Boeing & AEL. Boeing Company and Elbit Systems announce a Memorandum of Understanding (MOU) to cooperate in Brazil. As part of the MoU, Elbit has committed to investing in its AEL Sistemas S.A. subsidiary. Elbit’s 11″ x 19″ Large Area Display has already been picked for next-generation F/A-18 Super Hornet and F-15 Eagle variants & upgrades, and the implication is that AEL would help develop and integrate this capability in any Brazilian F/A-18 Super Hornets.
<