Three military aircraft makers are ready to submit their proposals to Malaysia for its decision to lease new multi-role combat jets to replace the ageing MiG 29s owned by the Royal Malaysian Air Force (RMAF).
BAE Systems plc, Boeing Co and Saab AB are said to be part of a shortlist of five companies that have been identified by the government to be possible candidates for the RMAF Multi-Role Combat Aircraft (MRCA) programme.
One of the two companies in the shortlist, Sukhoi Aviation Holding Co of Russia, has not indicated any interest while Dassault Aviation of France, the maker of the Rafale jet, has said it would not participate in any leasing programme.
After several deadline shifts for the procurement plan due to budget constraints, the RMAF is looking at the leasing option.
Analysts estimated the MRCA programme to have a budget between RM6 billion and RM8 billion.
They estimate that apart from Saab’s Gripen, the RMAF is also interested in BAE’s Typhoon, the Boeing F/A 18F, the Dassault Rafale and the Sukhoi SU-30.
Under the MRCA, the RMAF is looking to equip three squadrons with 36 to 40 new fighter aircraft.
According to aircraftcompare.com, the Eurofighter Typhoon cost US$70 million (RM229.44 million) each, the Gripen cost US$61 million each while the Rafale and F/A-18 F Super Hornet each costs US$68 million and US$67 million respectively.
However, the total cost of military aircraft usually varies based on the customer’s mission and weapon systems requirement, spare parts and training packages.
Saab is the only manufacturer in the world that has leased its fighter aircraft to other countries and other manufacturers, Frost & Sullivan Asia-Pacific consultant, aerospace and defence, Ravikumar Madavaram.
“Saab would be checking on it fighters in Malaysia from time to time to see how and what it is being used for but these inspections could compromise Malaysian defence autonomy.
“Malaysia must make a viable decision and prepare itself before leasing from a company that does not have any leasing experience and must be prepared for any eventuality when leasing fighters from other countries,” he said.
While this may present a hurdle, its unit Saab International Malaysia Sdn Bhd, which is linked to Malaysia’s business tycoon Tan Sri Syed Mokhtar al- Bukhary, is confident that the decision will side the Gripen.
Its MD Thomas Linden said Saab is banking on the Gripen aircraft’s affordability and cost-efficiency that is suitable for moderate defence spenders like Malaysia.
Analysts said Saab has offered to lease up to 24 Gripen combat aircraft together with two Erieye Airborne Early Warning (AEW) aircraft, similar to its deal with Thailand, with an option to buy when the RMAF has the allocation.
Saab was one of the first to submit a proposal for the programme. In 2012, RMAF chief Tan Sri Rodzali Daud said it was looking to lease at least 18 Gripens from Saab and that the company’s experience with leasing to other countries provides an edge.
“The Gripens had been leased to European air forces, so there is nothing new about such a deal as the aircraft also meets all of our MRCA requirements although I admit it is short on gas and range due to its small size,” he had said.
Saab’s bid will face competition from BAE, which is expected to submit in March its proposal for the Eurofighter Typhoon.
“We stand ready to support the Malaysian government in meeting its requirement for a cost-effective and high performance MRCA as we offer an innovative and cost-effective solution that will satisfy programme affordability and mission capability issues for the short and long term,” BAE communications VP Mark Ritson told The Malaysian Reserve.
“The details of our proposal are a matter for discussion between ourselves and our customer as we are confident that the Eurofighter will deliver the capability that the customer needs, when it is needed,” he said.
It was during the French Prime Minister Jean-Marc Ayrault’s visit in July last year that Prime Minister Datuk Seri Mohd Najib Razak indicated that Malaysia was looking at a cheaper option for the MRCA and other defence requirements.
“We will look at some of the requirements within the realm of our affordability, we will look at not only the MRCA but also other hardware including attack helicopters and weapons,” Najib had said.
Frost & Sullivan’s Madavaram said leasing fighter aircraft is a new trend, with Czech Republic and Hungary being the only two countries in the world to have leased fighters, both opting for Saab’s Gripens.