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BAE offers credit for Malaysian fighter bid
February 22, 2018
Eurofighter Typhoon. Photo source: BAE Systems

BAE offers credit for Malaysian fighter bid

Reuters reports that BAE Systems reiterated its willingness to facilitate a UK-based line-of-credit to back a sale of Eurofighter Typhoon fighters to Malaysia. The Royal Malaysian Air Force (RMAF) has been seeking 18 next-generation fighters to replace its legacy MiG-29s since at least 2017.

“We have an offer on the table…It’s competitively priced and we have offered UK government financing so the Malaysian government can spread the payment over a longer period,” said Alan Garwood, BAE’s Group Business Development Director.

It is unclear when Kuala Lumpur intends to pursue a contract in earnest, though the Typhoon remains as one of several contenders for the prospective contract.

Like BAE Systems, the Swedish defence giant Saab had also expressed its interest in backing a prospective Gripen sale with credit. In 2015, Sweden authorized a loan of 39.88 billion SEK (i.e. $5 billion US today) to back the sale of 36 Saab Gripen E/F to Brazil. The loan is to be repaid over 25 years.

In December 2017, Qatar signed on as the newest customer of the Typhoon with an order for 24 Tranche 3. Qatar’s order guarantees production work for BAE in the 2020s, with a potential Malaysian order clearly extending that scope well into the long-term. Likewise, the other Eurofighter Consortium members – i.e. Airbus Defence & Space (in Germany and Spain) and Leonardo – will also benefit from those orders.

Besides Malaysia, BAE Systems may also have an opportunity in Indonesia, which is reportedly forming a new fighter requirement amounting to several squadrons. Interestingly, Jakarta has yet to ink the contract for 11 Sukhoi Su-35 Flanker-Es from Russia’s United Aircraft Corporation, leaving an opening – albeit small – for a procurement review and renewed opportunity for the F-5 Tiger II replacement program.

However, Southeast Asia is also among the US’ key defence markets, with Boeing and Lockheed Martin both maintaining key long-term contracts in the region. In particular, Boeing is hopeful of expanding upon its F/A-18 Hornet program with the RMAF to the F/A-18E/F Super Hornet.

  • MOHAMMAD HARIS FAHIM

    Any hopes for PAF procuring major system to complement sanction prone F-16s and JF-17s? Or is the PAF firmly awaiting for J-31 to become consummate enough to buy?

    • In 2015-2016, there were reports of the PAF seeking another fighter to complement the F-16 and JF-17, but as of 2017, it seems the focus has shifted to relying on the JF-17 Block-III and Project Azm/5th-gen fighter. Unclear when the latter will realistically materialize.

      • Hassan Raza

        Any idea when azm will become reality? Air chief once said “we will have 5th gen jet within 5 years”

        • Shershahsuri

          Then it means it can be J-31.

    • Muhammad Abdul Rehman Jajja

      What ever ! Pakistan is becoming the weakest airforce in south Asia with handfull of JF 17s and F 16

      • Draco

        178 BVR capable fighters along with 8x AWACS & ground based AD network for starters. I won’t call it a weak airforce.

    • Faisal

      with India acquiring S-400 , probably Pakistan should look into acquiring something similar to secure its skies. With current situation , even if we procure 100 fighters from some country, its not going to secure our skies. Some strategists, architects and engineers need to put their heads together to decide what exactly do we need at this point.

  • Mohd Kamal Kassim

    Recommend RMAF seeking for j-20 over 25 years loan ,stealth is future gen. fighter ,BAE or SAAB over 25 years loan becoming scrap…..

    • Woo Jared

      China has reiterated J 20 is not for sale. J 15 possible

  • NMA

    RMAF should get the Predator F22 or Lightning F35 or otherwise forget the whole thing from the west.Get the Russian SU 35 instead.Dont buy old junk for our airforce.

    • Faisal

      I think US has stopped making F-22s and probably Malaysia wont want to depend on US too much. F35 has yet to prove its metal.

  • Steve

    UK is feeling unsure what sort of post Brexit economy it will be left with. Now that they have shot themselves in the foot they are looking around for trade deals with USA China India Africa etc. It is a good time to secure a market access deal post Brexit. If weapons are a part of that it’s good for us. We need quality adding weapons tech like radars, BVR missiles, materials, etc more, rather than 3 squadrons of Eurofighters. It may add kick to Project Azm particularly since BA is helping with TFX. A similar deal may be good. The neighbours will scream and shout and try to make it a zero sum game, but UK had got bigger issues and may overlook that. Did our foreign ministry delegation visit for a deal? Theresa May took big delegations to China and India, where’s Pakistan’s effort?

    • TZK

      With Brexit UK could revert to more trade with Commonwealth nations and defence equipment will certainly be part of that. India has not brought a major defence item from UK for a long time. Typhoon was rejected in favour of Rafale which itself is now subject of controversy in India. Also UK will shortly retire a number of naval vessels, tanks and planes from service.

      • Faisal

        Rafale is by far the best fighter jet in the world and a game changer for India. What is the controversy?

        • TZK

          The usual procurement shenanigans, looks like Modi not only betrayed his own policy of ‘make in India’ but got a worse deal than the previous govt had negotiated and got one of his business chums a slice of the Indian defence pie.

          https://www.ndtv.com/india-news/what-is-rafale-deal-controversy-all-you-need-to-know-1810706

          • Faisal

            Previous Govt was wasting too much time with things not moving forward at all. Modi moved forward with deal with 36 birds in fly away condition , leaving the option of remaining 90-100 planes to be negotiated with transfer of technology. It may or may not be Rafael. All big makers are either committing to making them in India OR spending a decent percentage of revenue in India which will benefit their private sector. I dont closely watch India procurements but it looks like so far Modi Govt has made right decisions for India.

          • Joseph

            But it is interesting that now India is choosing between F-16 and Gripen instead of buying more Rafale.

            Considering all three are the original candidates of MRCA competition, which Rafale won. That is not exactly a vote of confidence for Rafale.

            Adopting yet another different aircraft would increase the maintenance and support cost. Anybody knows why India no longer wants more Rafale?

          • Steve

            It’s €€€. Don’t want to bankrupt themselves trying to buy their way to being a superpower. That’s what India has been doing for decades. Buying a few from almost every big vendor country. Apart from the logistics nightmare it does not even make commercial sense. It’s does throw a spanner in Pakistan’s procurement plans but surely that’s can’t be the overarching reason. It would be good for us to stick with Block III, F-16 (a few more won’t hurt), and J-31/Azm. Focus more on high tech quality adding goodies on these platforms, and other force multipliers, and we are good to deter. Possible a couple of long range bombers squadrons to attack distant bases in the IOR. That may deter other people from allowing any basing rights, but we have to bold and threaten upfront. Not pussy foot around like the present lot of incompetent corrupt thieves. Why aren’t we conducting an exercise off Seychelles legal waters but close enough to give them pause? Tell Seychelles we are there for “goodwill” lol! The Kashmir dispute looks like is going to drag on for decades.

          • Joseph

            I also suspect the Rafale deal was not great in terms of cost. India could not afford to buy 100 more at that price and they also could not re-negotiate because if they did that it would mean admitting the original deal was not a good one (If Modi inked the deal that means it won’t happen as long as Modi is still in office). So I think they have to exclude Rafale now.

          • TZK

            Rumours mainly from Indian sources abound about possible F35 sales to India, but as one Indian commentator said on Quwa recently it is unlikely as India is also collaborating with Russia. Likely scenario is that F16 will be produced in India with the Navy getting the F18 and at some point they may get F35 when they expect the price to have come down as well.

            http://idrw.org/did-lockheed-martin-offer-f-35-or-f-16-to-india/

          • Steve

            It’s easy to create hype and Indians are good at doing that in their own media for their own public’s consumption. When it comes against cold hard-nosed international reality it is different. India is paying massive sums of money to the French for only 3 squadrons. It’s easy to claim “offset” when the price is more than usual anyway. €260M per plane is ridiculous! It’s telling that they are hiding the real price! Make sure you wrap them in cotton wool and put them in a Fort Knox style bank vault. Don’t crash any!

  • Steve

    Tell Saudis (Israelis) they can base 3 squadrons in Baluchistan, and let it be know to Iran unless they withdraw this Chabahar lovefest. The Iranians have lost all sense and are becoming an adversary.

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