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Thailand Buying JAS-39 Gripens, AWACS

13-Feb-2008 15:37 EST

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AIR_S-1000_and_JAS-39.jpg
Gripen & S-1000
(click to view full)

DII-QV


It’s a small, agile fighter that can take off and land on highways, while carrying the latest technologies and weapons. It does very well against NATO’s best aircraft in exercises, comes with a reasonable price tag, and is built for low lifetime operating costs. Unfortunately, in a world where people often buy your weapons because they want you to be their friend, the cachet of having Sweden in your corner isn’t quite what it used to be when their sailors wore those cool horned helmets. As a result, the JAS-39 Gripen is an excellent, reasonably-priced fighter that has been struggling hard for traction in the global marketplace. “The JAS-39 Gripen: Sweden’s 4th Generation Wild Card” looks at this capable lightweight fighter and its market opportunities, and wonders if Gripen will be “the little fighter that could” – or the last fighter from a storied aviation industry.

A recent sale to Thailand has expanded Saab’s horizons somewhat, as the Gripen beat out the SU-30s favored by the previous Thai government to replace its 15-25 aging F-5B/Es; other reported candidates were Russia’s MiG-29 and France’s Rafale, and the F-16 had been considered a leading contender given Thailand’s extensive history with that aircraft. In order to achieve this win, however, Saab has to throw in a very significant “something extra.”

The sale itself also runs future political risks due to Thailand’s situation; but a contract has now been signed…

The Thai AF and the Program

AIR F-5T ThailandThai F-5T (click to view full)

At present, the Royal Thai Air Force’s fighter fleet consists of old 1960s-70 era upgraded F-5E/F Tiger IIs, plus AV-8S Harrier IIs and F-16A/B fighters. A number of its neighbors are currently flying longer-range and more advanced SU-27/30 Flanker fighters, however, including India (SU-30MK & SU-30MKI), Indonesia (SU-27SK & SU-30MK), Malaysia (SU-30MKM), Vietnam (SU-27SK), and China (SU-27SK/J-11 & SU-30MKK).

In mid-October 2007 The Thai Cabinet approved a budget of 34.4 billion baht (about $1.1 billion) for the Royal Thai Air Force (RTAF) to purchase 12 JAS-39 Gripen multi-role fighters to replace its aging fleet of F-5 B/E Tiger II aircraft (the Israeli-upgraded F-5Ts with DASH helmet displays and Python missiles will remain in service). The RTAF will also buy 2 Saab S-1000 Erieye Airborne Early Warning aircraft, together with associated equipment and services. Negotiations between Thai and Swedish government officials will now commence in order to conclude a formal agreement.

The Saab Erieye AWACS was recently sold to Pakistan, and uses a fixed active-array S-band antenna with 200 solid state modules. The look angle on each side is about 160 degrees, with a maximum range of about 450 km (279 miles) from 20,000 feet, and effective range against fighter-size or seaborne targets of about 300-330 km (180-205 miles). The electronically scanned antenna can scan sectors of interest frequently while others are monitored, and a single sector can be scanned in different modes at the same time.

Delivery of the Gripens into operational service of the Royal Thai Air Force is planned for 2011, and the buy is divided into 2 phases:

AIR_S100B_Argus_AEWC_Cutaway_lg.jpg

Phase 1 covers 6 JAS-39 Gripen fighters (2x JAS-39C single-seat, 4x JAS-39D 2-seat), including spare parts and training; and 2 Saab 340 turboprop aircraft. One Saab 340 will be outfitted as an S-1000 airborne early warning system with Saab’s Erieye radar, while the other will be a training and transport platform. The cost would be about 19 billion baht/ SEK 3.8 billion/ $600 million1, spread within a 5-year budgetary commitment from 2008-2012.

In Phase 2, the RTAF intend to procure an additional 6 Gripen fighters together with associated equipment, spare parts and training, and a 2nd Saab S-1000 Erieye AEW system aircraft, for about $500 million over a 5-year budgetary commitment from 2013-2017.

Sweden has also offered the Gripen fighters with a 2 (two) years maintenance and spare parts support package. As is frequently the case, Saab’s deal includes industrial offsets and benefits involving Saab investment, and Thai-Swedish industrial, science & technology co-operation, technology transfer, and investment co-operation.

Thai Air force chief Chalit Phukphasuk Chavalit reportedly met with Prime Minister Surayud Chulanont on Sept 29/07 and convinced him to support the purchase, citing the need for new combat aircraft to match neighbouring Malaysia’s new SU-30MKMs. Prime Minister Thaksin Shinawatra reportedly ordered then air force chief ACM Kongsak Wantana to switch to the SU-30s for Thailand’s own purchase, but ACM Chalit rejected the plane as unsuited to Thailand’s needs when he became the new air force chief.

Wild Card: Thailand’s Political Situation

PPL Thaksin Shinawatra
The elephant in the room

The Thai government of Prime Minister Thaksin Shinawatra was ousted in a Sept 19/06 coup that was widely believed to have been masterminded by Thailand’s king, with the cooperation of its military. That may have provided Saab with its opportunity, as an Australian newspaper reported a Thai officer as saying that ”....we preferred F-16 C/D over Gripen, [but] the Americans are not allowed by their laws to sell weapons to countries whose governments have been ousted in coups.” On the other hand, the US State Department has told Jane’s that there are no restrictions on weapons sales to Thailand.

Whatever the case may be, Sweden’s fighter won. In response, its government appears to have opted for a policy of constructive engagement. While the opposition party has voiced misgivings, Swedish Minister for Foreign Affairs Carl Bildt said:

“I welcome the decision from the Royal Thai government to start negotiations with the Swedish government, to purchase Gripen fighter aircraft and the Saab Erieye Airborne Early Warning (AEW) system. This decision once again confirms that Gripen is a world class and cost effective system. The selection of Gripen was made in fierce competition with advanced US and Russian systems. We must now wait for the result of the formal negotiations that will now commence between the Swedish and Thai authorities. When a formal agreement is in place, this will be managed in accordance with the appropriate export legislation, rules and regulations.”

The current situation created that opportunity for Saab, by sidelining the previous choice, and opening the doors to a significant budget increase for Thailand’s military. It could also serve to torpedo the deal later on, of course, if the government that follows decides to undo what its military predecessor has done. Thaksin Shinawatra has stated that he has no intention of returning to politics, but he remains popular in many parts of Thailand, and his supporters could come looking for payback once elections begin again. Fighter jets are high-profile military deals with a lot of symbolism behind them, which makes them attractive targets in such situations. The Gripen’s planned acquisition period is also rather long, and much of that period will follow planned elections. This is a significant risk factor.

Until Thailand actually accepts jets into operational service, therefore, we’re hesitant to count this deal as truly done. The Gripen will also have to demonstrate exceptional performance against RTAF F-16s to make a strong case for Phase 2 and build a strong cadre of support within the Thai military. The Gripen is certainly capable of performing at that level – but much of the turbulence ahead of it will be of a type that its avionics aren’t programmed to handle.

Contracts & Key Events

AIR F-16A Thai

Feb 11/08: Swedish FMV Director General Gunnar Holmgren, and Commander in Chief of the Royal Thai Air Force (RTAF) Air Chief Marshal Chalit Pukbhasuk, sign a contract in Stockholm, Sweden for Phase 1 of the deal as outlined above. The contract’s value is SEK 2 billion (about $310 million). This is a lot less than the full Phase 1 contract, but Sweden’s FMV informs DID that:

“The total value of the deal signed on 11 February is 19 billion baht. The figure 2 billion SEK refers to the contract between FMV and Saab is a part of the total value.”

Saab release | Gripen International release.

Jan 24/08: The Swedish Government authorizes the FMV (Defence Materiel Administration) to enter into a sales agreement with the Royal Thai Air Force. While Saab makes the aircraft, this will a government to government deal structure, with Saab as the contractor. The reported SEK 3.8 billion order covers 6 JAS-39 Gripen aircraft, Saab’s Erieye surveillance aircraft, and accompanying datalinks that let these aircraft all share a common picture of the battlespace.

The agreement will still be conditional upon the Swedish Inspectorate of Strategic Products (ISP) issuing export licences after a review, per customary procedure. Swedish MoD | Saab release.

Jan 8/08: The Thai News Agency reports that the cabinet has approved the Bt 19 billion ($637 million) budget for the first 6 Gripen fighters.

Nov 6/07: A DID reader in Sweden writes to dispute the Defense News report:

“The claim “Prime Minister Frederik Reinfeldt has welcomed the sale, although he did concede that the country’s strict arms export laws prohibit the sale of arms equipment to “non-democracies.”... is just 100% fabrication, without quotation and factually wrong. They even misspelled his name. The PM said no such thing and it’s not even proper for him to comment as its a parliamentary committee that judge on this without ministerial influence.

The quick relevant facts relating to Thailand is that Sweden has NO democracy-requirement in the regulations, there’s no UN/EU embargo and Sweden has exported military products both this year and last year to the Thai junta. When (if) Thailand sign a contract they need to then apply for a export permit by the Swedish Inspectorate of Strategic Products (ISP). And it’s regulations not laws.. depending on how you read them we’re not even supposed to export to the USA or Britain because they are now in armed conflicts. But yet we do because other rules override weaker ones. Anyway.. the point is, we have no democracy requirement for exports as our exports to Pakistan and Saudi Arabia clearly show.”

Oct 29/07: Defense News reports that the sale may face political problems at home. Sweden’s Arms Export Control Regulations (AECM) ban military exports to “undemocratic states” or countries engaged in civil unrest. Mona Sahlin, the leader of the Social Democrats party says “The question, ‘Is Thailand a democratic state?’ may need clarification before this sale is approved.”

Thailand is currently classified as a “country moving towards a democratic rule” under the AECM, as the military leaders have said that they plan to step down and hold free and fair elections. There is a strong school of thought in Europe that “constructive engagement,” with incentives built in for pledges of reform and for better behavior, is the best option when dealing with unfree states, up to and including the world’s worst regimes. If that doctrine prevails in Thailand’s case, its status as a mildly authoritarian regime that has pledged to restore democracy should remove obstacles to the sale. Time will tell.

Oct 25/07: Jane’s Defense Weekly reports that the US State Department told them it “has no restrictions on military sales to the government of Thailand.” This is important, because the GE F404 engine that powers the Gripen needs US permission for exports. It’s also an enlightening statement, as it suggests that the F-16 option was a possibility when the Gripen was selected.

Oct 17/07: Announcement made that Thailand has selected the JAS-39 Gripen in a 2-phase deal.

Footnotes:

1 Figures vary. The Bangkok Post specifies the deal as $34.4 billion baht overall. Gripen international referred to the deal’s components as “19,000 billions baht (US$ 600 million)” and “15,400 billions baht (US$ 500 million).” We think they may have meant 19,000 million (i.e. 19 billion) and 15.4 billion baht. To put that 10-year budgeted cost in perspective, Thai military spending was 29 billion baht the year before the coup. The 2008 military budget is 140 billion.

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