Oman seeks Bid for Euro-fighter

The government of Oman has requested that BAE Systems submit a formal bid for the supply of Typhoon fighter aircraft. The move clarifies the Middle East nation’s continuing commitment to the program following delays in completing negotiations.

A spokeswoman for the U.K.-based defense company said it expected to complete negotiations by the end of the year, with deliveries of the first aircraft taking place 36 months later.

The request for proposals involves a squadron’s worth of Tranche 3 standard aircraft — about 12 airframes — a support package and training for the Omani air force.

Last month, Oman ordered a second batch of 12 F-16 Block 50’s from Lockheed Martin in a $600 million deal

The Omanis formally stated their intention to purchase the Eurofighter Typhoon in early 2010, and company executives said at the time that the deal could be ready for signing within months.

In a statement, BAE said it welcomed the release of the request for proposals, adding that the news underpins its long-standing defense and security relationship with the sultanate as a major equipment supplier.

The most recent major equipment sale was signed in 2007 to deliver three corvettes to the Omani navy in a deal valued at 400 million pounds.

The warships remain undelivered for technical reasons.

The first of the Khareef-class vessels should have been handed over in 2010 but have been delayed following the discovery of technical problems during sea trials.

The spokeswoman denied that the signing of the fighter deal between the two sides is dependent on the agreement of a get-well package for three corvettes.

The spokeswoman said the first of the corvettes is now scheduled to be handed over at the end of the second quarter.

The Omanis’ commitment to Typhoon follows recent competition losses for the fighter in Japan and Switzerland.

A decision by India on whether to select the Eurofighter aircraft or its French rival, Dassault Rafale, is imminent.

Earlier this month, BAE announced that talks with the Middle East’s first Typhoon customer, Saudi Arabia, over amendments to a deal to supply 72 fighters, were dragging on and would likely affect its 2011 earnings.

The original deal called for the first 24 aircraft to be delivered from the BAE production line in the U.K., with subsequent assembly in Saudi Arabia.

BAE and the Saudis announced a change of plan last February over where the final 42 aircraft would be built but are still haggling over the details.

Typhoon is a four-nation program involving the Germany, Italy, Spain and the U.K. So far, it has exported the aircraft to Austria and Saudi Arabia

Swiss Socialists Want Public Vote on Jet Deal

GENEVA - Swiss socialists want to hold a referendum on the government's 3.1 billion franc (2.5 billion euro) purchase of a new fighter jet fleet if the deal affects spending elsewhere, it was reported Dec. 3.

The Federal Council revealed on Nov. 30 its proposal to buy 22 Swedish-made Gripen planes to replace its aging F5 fighters.

Socialists fear the deal will mean a rise in military spending that could translate into budget restrictions in other departments, notably education, transport and agriculture.

Meeting in Lucerne on Dec. 3, party members unanimously passed are solution on the matter after a document outlining the group's position was approved in October, ATS news agency reported.

The party rejects the prospect of a spending rise all the more because there was no public vote on the plane deal, described as a "scandal" by National Council (parliament) member Eric Voruz.

It will launch a referendum if parliament seeks a legal base to justify budgetary restrictions or requests a rise in military spending to cover the acquisition.

If such a referendum does not halt the deal the, socialists will call for a moratorium on the purchase until 2025.

The Gripen deal will be put to parliament as part of the government's 2012 arms program. Parliamentary decisions can be put to a public vote in Switzerland if a sufficient number of votes are collected.

Switzerland Investigates Leaked Fighter Jet Report

GENEVA - Swiss prosecutors have launched a probe into a violation of official secrecy after reports related to the purchase of new fighter jets were leaked to the media, a judicial source said Dec. 2.

The federal prosecution office confirmed the launch of the investigation to AFP following reports in local dailies Tages-Anzeiger and Bund.

The probe concerns two classified reports by the Swiss air force that were critical of the Swedish Gripen aircraft, manufactured by Saab, and which were sent to another newspaper, the Basler Zeitung.

The reports were published just days before the Swiss government's decision on which type of combat aircraft to buy.

Despite the damaging reports, the Swiss government opted for the Gripen in the deal worth more than 3 billion Swiss francs (2.5 billion euros), over rival models the French Rafale and the Eurofighter.

Dassault Critiques Financial Logic of Gripen Pick

PARIS - Dassault criticized the financial logic of selecting the Saab Gripen after Switzerland selected the Swedish single-engine fighter jet over the competition rivals Eurofighter Typhoon and the French-built Rafale.

"The 'Swiss-tailored' Gripen only exists on paper. Its technical development and production risk significantly increasing the financial efforts required of the Swiss authorities to accomplish the country's fighter aircraft program," the Dassault-led Rafale International team said in a Nov. 30 statement.

The Rafale reaction came after Switzerland earlier announced it would buy 22 Gripen fighters to replace its fleet of F-5 Tigers.

A Rafale selection would have met the Swiss operational requirements with a smaller number of aircraft "at an equivalent or lower cost," the Rafale industrial team said. Those capabilities had been "demonstrated during the assessments by the Swiss Air Force," the statement said.

The Rafale team regretted that the Swiss authorities "knowingly decided not to position Switzerland at the highest European level as regards to the performance of the new fighter aircraft," the statement said, quoting the Swiss Federal Council.

Saab welcomed the Swiss selection of the Gripen.

"Given that Switzerland is known globally for applying (the) highest procurement standards and requesting state-of-the art technologies, Saab is both proud and delighted that Gripen has been chosen as the Swiss Air Force's future multirole fighter aircraft," Saab said in a statement.

"The Gripen program will create a long-term partnership between Switzerland and Sweden. Saab assures Switzerland a long-term strategic industrial co-operation aimed at creating sustainable high tech jobs, transferring technology and generating export business," the statement said.

The Rafale team said it had reached out to 250 Swiss companies to create a local industrial partnership in the 26 Swiss cantons.

The Swiss defeat follows a setback in the United Arab Emirates for the Rafale, with Dassault's bid described as "uncompetitive and unworkable," by the Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed, who is also deputy supreme commander of the armed forces.

Switzerland Taps Saab's Gripen as F-5 Replacement

STOCKHOLM - Swedish defense group Saab AB said Nov. 30 it was "proud and delighted" over Switzerland's decision to purchase 22 of its Gripen fighter jets to replace its aging F-5 fleet.

"Given that Switzerland is known globally for applying (the) highest procurement standards and requesting state-of-the art technologies, Saab is both proud and delighted that Gripen has been chosen as the Swiss Air Force's future multirole fighter aircraft," Saab said in a statement.

The Swiss selection "confirms that Saab is a market-leader in the defense and security industry and that Gripen is a world-class fighter system that provides the best value for money", Saab CEO and president Haakan Buskhe said in the statement.

Gripen is already in service with the Swedish, Czech, Hungarian, South African and Thai air forces.

Saab saw its share price take off on the Stockholm stock exchange after the announcement. Saab closed up 11 percent at 120 kronor ($17.75) in an overall market that closed up 5.14 percent.

EU President Warns of Asia-Pacific Militarization

ZURICH - The Asia-Pacific region is showing signs of militarization that could lead to an arms race, EU President Herman Van Rompuy warned Nov. 9, calling for closer trade ties to defuse any political tensions.
"Whereas Europe used to be the most dangerous continent in the past century... the focus of security analysts and hard power strategic planners has recently moved towards developments in Asia and the Pacific," said Van Rompuy in a speech at the University of Zurich.

"They do not yet observe a full-blown arms race, but in terms of military spending and confrontational psychology, the premises of an arms race are there," he added, without naming individual countries.
"It will thus be key to continue deepening economic relationships within that region, so as to make a war as it were 'materially impossible,' " added Van Rompuy.
Noting that the EU is a key trading partner to major economies in the region, the EU Council president said Brussels "does not only have a significant stake in regional stability, but itself is a potential major factor contributing to this stability."
This fact "should also be reflected in higher political attention paid to and political activity shown in the region," he added.

Exchange Rate Behind UAE Rafale Balk: Dassault

PARIS - The price resistance from the United Arab Emirates on the Rafale fighter jet stems from an unfavorable euro-dollar exchange rate, but talks on the French aircraft continue, Dassault Aviation executive chairman Charles Edelstenne said July 28.

The UAE's discussion with Lockheed Martin about a potential purchase of additional F-16 fighters was "not a negative sign," Edelstenne told a press conference on the company's results for the first half of the year.

"Talks are going on," he said.

But with the euro at $1.40, the Rafale's sale price was boosted by the currency exchange rate, Edelstenne said. Dassault could not cut prices by 40 percent to offset the weaker dollar.

"I make Mirages, not miracles," he said.

The euro was trading at $1.43 in early afternoon, with the dollar under severe pressure from the U.S. government impasse on raising the debt-ceiling limit ahead of the Aug. 2 deadline.

Edelstenne refused to disclose the unit price of a Rafale, but he said an export purchase generally involves a political decision to pay a "price premium" that granted "independence of action." As the Rafale is built in France, reflecting a strategic decision on sovereignty, its costs are in euros, making it more expensive than an American fighter aircraft sold in dollars.

On the French government's July 20 decision to start negotiations with Dassault on a supply of the Heron TP medium-altitude long-endurance (MALE) UAV, Edelstenne said this meant sustaining a French design capability in military aircraft instead of paying for the "Messerschmitt design office" in EADS.

Edelstenne said in picking OHB over EADS, Germany made similar national selections in its space procurement.

Asked what the significance was in selecting Dassault as supplier of an interim MALE UAV, Edelstenne said the choice showed a determination to maintain a French national capability in building combat aircraft, as the next manned fighter jet would not enter service for another 30 to 40 years.

The negotiations would determine what sensors and communications payloads would go on the Israeli Aerospace Industries' UAV air vehicle, which is intended to provide an interim solution until the planned Anglo-French new generation MALE UAV enters service, expected in 2020.

IAI has agreed to disclose technical information on the Heron TP, which will be adapted to French requirements, including the ability to carry weapons, Edelstenne said.

The interim MALE UAV could have a service life of around 10 years and could overlap with the new Anglo-French air system, a company executive said.

On an asset swap under negotiation between Safran and Thales, Edelstenne said the airplane engine and equipment maker was holding up a deal by saying "no" to each new proposal from the electronics company. That forced Thales into a corner, he said.

"The valuation levels are a bit extraordinary," Edelstenne said.

Dassault signed an agreement with the government on an asset swap when it took its 26 percent stake in Thales, covering inertial navigation, onboard electricity generation and optronics, Edelstenne said.

Safran's sales in optronics are worth around 600 million euros, and if the business were put into Thales, that would make the electronics company second or third in the world market for electro-optics.

At the Paris Air Show in June, French President Nicolas Sarkozy said the government would impose a settlement if industry failed to reach a voluntary agreement.

Edelstenne said he was "very satisfied" with the Thales first-half results, which were released on July 27. The results displayed early effects of the Probasis restructuring plan and improved management of large programs and contract negotiations, he said.

Dassault reported a 35 percent fall in net profit to 129 million euros from 197 million euros a year ago, as sales dropped 34 percent to 1.32 billion euros from 1.99 billion euros.

The sales and profit slide came from lower deliveries of the Falcon business jet, with a delay in shipment of the Falcon 7X into the second half.

Orders declined to 95 million euros from 99 million euros.

On a production rate of one unit per month, Dassault has delivered six Rafale jets so far this year out of 180 total orders to date.

Privately, company executives expect the French government to stretch out future Rafale orders because of expected defense budget cuts, especially if export contracts are won.

Besides the UAE, Dassault hopes to sell the Rafale to India, Brazil and Switzerland. India is holding to its timetable to buy 126 medium-range combat aircraft, and the Swiss government has shown renewed interest in replacing its F-5 fighters.

UAE Eyes F-16 as Rafale Talks Falter

PARIS - The United Arab Emirates (UAE) is talking with Lockheed Martin about buying more F-16 fighter jets because France's offer of an advanced version of the Rafale is seen as too expensive, said a source familiar with the negotiations in the Arabian Gulf.

Discussions on the F-16 pile pressure on Dassault Aviation, builder of the Rafale, to cut prices and on the French government to increase funding for upgrades seen as vital to sealing an export deal for the twin-engine combat jet with the UAE, analysts said.

In the 1990s, the UAE bought 80 F-16E/F fighters under a $7.3 billion foreign military sales contract.

"The UAE is finding the Rafale offer to be too costly compared to the capabilities of aircraft and other technologies on the market," the source said. "The negotiations with France are still ongoing, and both sides are looking for a compromise."

The UAE has been seen as a potential first export buyer of the Rafale in a deal estimated last year at $10 billion. Meetings on the sale of the French fighter took place at the Paris Air Show, which ended June 26.

But price resistance has led UAE officials to open discussions with Lockheed to buy more F-16s with the latest "weaponry and targeting sensors," the source said.

Last year, UAE officials asked for technical information on Boeing's F/A-18E/F Super Hornet following a political chill at the highest levels between Abu Dhabi and Paris.

In talks with the French, the elements said to be stretching the UAE's planned budget are the co-development costs for a more powerful "special" version of the Rafale, plus maintenance and spare parts. The UAE wants its Rafales powered by Snecma M88 engines, whose 9 tons of thrust would provide 1.5 tons more than the version flown by the French Air Force.

Other improvements requested include a longer-range active electronically scanned array (AESA) radar and a more capable Spectra electronic warfare suite.

The upgrades previously have been estimated at 2 billion euros ($2.9 billion) by then-French Defense Minister Hervé Morin.

Officials with Dassault Aviation declined to comment. Shortly before the Paris Air Show, Dassault Chief Executive Charles Edelstenne said of the Rafale offer to the UAE, "the talks are advancing."

The gulf source said, "Lockheed Martin is offering a very attractive financial package."

A UAE sale might help Lockheed keep its F-16 assembly line open after India rejected the U.S. fighter in its Medium Multirole Combat Aircraft competition.

Lockheed officials were unable to comment by press time.

France badly needs export success on the Rafale, a showcase of military technological competence, as the national defense budget assumes foreign contracts to help pay for a steady rate of production.

Dassault has said it must build 11 Rafales per year to keep the production line running at an economical rate.

Large companies depending on the Rafale include Safran subsidiaries Sagem for the forward-looking infrared gear and Snecma for the jet engines, as well as Thales for the electronics and RBE2 AESA radar, and MBDA, which hopes to sell the Meteor long-range missile.

The UAE's interest in the F-16 has forced Dassault to reduce prices, said Loic Tribot La Spiere, chief executive of think tank Centre d'Etude et Prospective Stratégique. Dassault has little room to maneuver as it must sell the Rafale, needed to boost "other opportunities" in export markets, he said.

Dassault hopes to sell the Rafale to Brazil, India and Switzerland, among other countries.

"Faced with this development, Dassault could go far in concessions, and the Emirates know it," Tribot La Spiere said.

But the U.S. also has an urgent need to boost exports, given its dire domestic economic situation, Tribot La Spiere said. The gulf is seen as a region that helps sustain U.S. activity.

"In this context, it is a safe bet that buying the F-16 aircraft could be seen, or rather proposed, as underwriting a security insurance policy: 'You buy this product and we will ensure your security, even internally,'" he said.

Research fellow Hélène Masson of think tank Fondation pour la Récherche Stratégique said the UAE's talks with Lockheed are a "radical means to put pressure on Dassault's offer."

The move may raise France's financial burden to pay for the Rafale's development, particularly the M88 engine.

"The central problem is really the funding for the aircraft's new functions, notably the engine," Masson said. "It's a way to say to the aircraft maker, and above all, the French Defense Ministry, that they must contribute more significantly to the development of this new version of the M88 and so reduce the financial cost to the UAE. ... Yes, this is really a chess game."

Dassault refuses, as a policy, to use company money to fund military aircraft development, insisting the government client pay.

The French Air Force is understood to be content with the current engine's performance, so it appears Paris must decide whether to further fund upgrades to win the UAE sale. That comes as France seeks to cut its public deficit.

In the 1990s, the UAE bought 80 F-16E/F fighters, with distinctive conformal fuel tanks, under a $7.3 billion contract through the Pentagon's Foreign Military Sales program. A reported $3 billion of that amount went to co-develop the Block 60 Desert Falcon, widely viewed as the most capable version of the F-16 worldwide.

As co-developer, the UAE is co-owner of some of the sensitive military technology on the Block 60 version. As part of the deal, UAE personnel worked on the co-development program, and Lockheed trained Emirati nationals to service the Block 60 aircraft.

The 1990s also saw the UAE buy Dassault Mirage 2000-9s, which were more advanced than the 2000-5 flown by the French Air Force. Older Mirage fighters were also upgraded to the more capable variant.

The Mirage 2000-9 fleet still has a long life ahead, but the UAE could start taking delivery of the new F-16s in under five years while keeping its Mirages, the source said.

France has offered to buy back the Mirage 2000-9 fleet and resell it in export markets to encourage the Rafale sale to the UAE.

The UAE has bought the Black Shaheen cruise missile for the Mirage. The UAE also has the long-range strike missile Hakim, which was shown under the wing of a Rafale model displayed in February on missile maker MBDA's stand at the IDEX arms show in Abu Dhabi.

Pilatus to Sign Aircraft Deal with India: Report

GENEVA - Switzerland's Pilatus Aircraft is about to sign a record deal to supply 75 of its successful PC-7 trainers to the Indian Air Force for 850 million francs ($1 million), according to a press report June 18.
The daily Le Temps, which described the contract as the biggest in the company's history, said it could eventually be extended to as many as 200 of the single-engine turboprop.

Pilatus declined to comment on the report that the trainer had been selected as the winner of offers invited by India two years ago for a new trainer.
More than 500 PC-7s have been sold across the world to air forces and private customers.

Pilatus declined to comment on the report that the trainer had been selected as the winner of offers invited by India two years ago for a new trainer.
More than 500 PC-7s have been sold across the world to air forces and private customers.