Saudi Rumors of Rafale: Stalled?Oct 28, 2007 17:04 UTC by Defense Industry Daily staff
In December 2006, The Business online reported that the Saudi government was in talks to buy 36 Rafale fighter jets from the French, regardless of how ongoing issues with the Eurofighter Typhoon contract were resolved. The Dassault Rafale contract would reportedly be in addition to the Eurofighter, not an either-or deal. With support and complementary ordnance added in, this could easily become a $5-15 billion transaction of its own.
It was just the latest chapter in a string of reports along these lines that stretch back to at least April 2005. Now, a Reuters report indicates that interest in the French fighter may be fading.
The Saudis have saved fighter production lines before. In September 1992, a long-awaited $5+ billion sale of 72 F-15XP/S Strike Eagles to Saudi Arabia saved the F-15 production line from imminent shutdown. In late January 1993, Saudi Arabia placed its long-awaited Al Yamamah II order for 48 Tornado Interdictor Strike (IDS) aircraft, just several weeks after the Panavia production line finished its last home-country Tornado order. Ironically, that Al Yamamah deal would later become the focus of a major fraud investigation in the UK, and put the planned Saudi purchase of the BAE/EADS Eurofighter aircraft on hold.
That may have opened the door for a Rafale sale, but it was not the only reason. Despite earlier reports of a British offer to delay some of its own procurement in order to get 24 Eurofighters to the Saudis quickly, The Business reports that one key consideration driving the negotiations is France’s ability to deliver the Rafale quicker than the Eurofighters can be manufactured. A senior Saudi source reportedly said:
“Two things have changed in the five years since negotiations began with the British over Eurofighter. The Saudis now have more cash because of money from oil and the situation [with Iran] means it has a pressing need to bolster its airforce…”
With its main competitor in a tailspin, it appeared to be an ideal time for Dassault to swoop in and win a deal. This has not happened, however, and their contender brings some baggage of its own.
Dassault’s Rafale has lost every fighter competition it has been considered for thus far: South Korea (F-15K), the Netherlands (probably F-35), Norway (uncertain, Gripen, F-35, or Eurofighter), Singapore (F-15SG), and the UAE (F-16 E/F Block 60). It seems likely that probably Morocco will soon be added to that list. The aircraft remains part of India’s MMRCA competition, but it is not a favorite. Despite Dassault’s rosy projections for the global fighter market, this difficulty in finding foreign orders has choked expected investments and started to feed back into platform modernization issues.
A Saudi order, securing the aircraft’s first major export customer and funds to help modernize the platform, would have meant far more to the Rafale platform than just an immediate set of jobs and cash. The French knew this, which is why their former President Chirac worked so hard on this sale. The Saudis knew it, too.
Then there’s the fact that any sale to the Saudis would also anger Iran, whose regime recently published an attack on France in a Jomhuri’yeh Islami article entitled “We ought to be the ones who start the sanctions.” France in particular was criticized for taking Iranian commercial favors in various sectors and not providing all of the expected quid pro quo. One passage reads:
“Mr. Chirac cannot dance with our enemies and at the same time wink in our direction and all the while pillage from the share of all Iranians. The circumstances over the oil and gas contracts and their car manufacturing is a subject that if scrutinized clearly shows nothing more than a total unilateral profit off of Iran and Iranians by the French…”
From the French government’s point of view, therefore, a sale to Saudi Arabia would not be an unalloyed benefit.
From the Saudi point of view, a move to the Rafale would complicate their air force’s logistical tail and weapons inventory, which is firmly American and British. Yet there is precedent in the Saudi land forces, which are split between American and French equipment in order to reduce supplier dependency. Almost complete support is just another outsourced contract item, and recent legal pressures in Britain are lessening its value to the House of Saud as the alternative air force supplier they can count on if the political situation with America deteriorates.
Given these imperatives on both sides, DID’s prediction in December 2006 was that the resulting negotiations would be very interesting.
Nov 18/09: Tactical Report’s headline is clear as can be: “Saudi King Abdullah-Sarkozy: no Nuclear, no FREMM and no Rafale.”
Nov 2/07: Defense Aerospace reports that a Memorandum of Understanding for over 150 Mi-17 Hip utility helicopters and Mi-35 Hind attack helicopters was signed in Riyadh in mid-September 2006 by King Abdallah bin Abd al-Aziz Al Saud’s private cabinet.
The article “France Loses Out as Saudis Sign $2.2 Billion Deal for Russian Helos” discusses the new arrangements, and also ventures some explanations as to what went wrong with the helicopter deals – and the attempted Rafale sale may be partly responsible. Short answer: the Chirac government put far too much pressure on linked bundles of equipment, rather than just accepting the client’s money, giving them what they asked for, and saying “thank you.” If the article’s claims are true, that insistence may have cost EADS Eurocopter over EUR 3 billion. DID coverage.
Oct 28/07: Reuters quotes French Defence Minister Herve Morin as saying that France is no longer pushing Saudi Arabia to buy Rafale fighters now that the kingdom has purchased EADS/BAE Typhoon jets from Britain.
“We haven’t discussed Rafale in Saudi Arabia. It’s not a current issue… I think that after the Typhoon order it’s not necessarily a priority.”
Sept 17/07: All parties formally announce the signing of a contract for 72 Eurofighters. The actual contract was signed on Sept 11/07:
“In line with the approval of the Custodian of the Two Holy Mosques, and with reference to what was earlier announced about signing an understanding document by the governments of the Kingdom of Saudi Arabia and the United Kingdom on 7/7/1427 AH, for the development of the Saudi Armed Forces within the framework of the existing close defense relations between the two countries and which include the purchase of 72 Typhoon planes in addition to transference of technology and investment in the field of defense industries in Saudi Arabia as well as training of Saudi citizens in the field of aviation, a contract was signed by the two governments on Tuesday, 29/8/1428 AH for purchase of the mentioned planes at a cost of 4,430 million sterling pound [DID: about $8.86 billion/ EUR 6.5 billion]. It is worth mentioning that the price of one plane is similar to the price of the plane when it is sold to the Royal British Air forces.”
Read “The 2006 Saudi Shopping Spree: Eurofighter Flies Off With Saudi Contract” for the full report, and subsequent updates.
Feb 16/07: Defense Aerospace “France’s On-Again, Off-Again Saudi Arms Sales.” Describes slowdowns in contract signings that go beyond the Rafale, and also include proposed purchases of 2 Airbus A330MRTT multi-role tanker aircraft, 42 Eurocopter Fennec light helicopters, 64 NH-90 battlefield helicopters (10 NFH-90 naval helicopters, 42 TTH-90s for the Saudi Army and 12 more for the National Guard), 20 Eurocopter Cougar Combat Search and Rescue helicopters; 4 Eurocopter Panther naval Search and Rescue helicopters; and an initial batch of 12 Tiger attack helicopters for the National Guard.
The article adds that a number of announced DSCA requests in the USA also remain without contracts to date. Speculation regarding the delays includes the possibility that Saudi infighting around royal succession is diverting attention from procurement issues.
- The Tribune-Libanaise (June 22/06) – The Dynamics of Weapons Procurement in Gulf States. Must-reading in this area.
- BBC (Dec 1/06) – Paris ‘threatens’ BAE Saudi deal. “French and Saudi officials are in talks over the sale of Rafale fighters, planemaker Dassault has admitted…”
- Daily Telegraph (Nov 26/06) – French Angle for Saudi Billions
- Middle East Times (March 6/06) – Chirac wraps up Saudi visit without defense deal
- Financial Times (April 15/05) – Saudis pledge to buy French jets in â‚¬6bn deal. “Saudi Arabia has agreed in principle to acquire up to 96 Rafale combat aircraft from France’s Dassault Aviation for some â‚¬6bn, Les Echos, the FT’s French sister newspaper, has learnt. The agreement forms the cornerstone of a broader defence, security and industrial accord estimated to be worth up to â‚¬20bn ($26bn, Â£14bn) signed during a meeting in Paris yesterday between Jacques Chirac, French president, and Crown Prince Abdullah, Saudi Arabia’s de facto ruler.”
- AIAA, Aerospace America magazine (November 2003) – The end of the Saudi Aircraft market?