Procurement: Swedish Jets Cheap But Not That Cheap


April 16, 2013: The recent sale of 22 Swedish JAS 39E Gripen jet fighters to Switzerland was accompanied by an increasingly more common sweetener. The Swedes will have Swiss firms manufacture some of the aircraft components ($213 million worth). This is about six percent of the cost of the 22 JAS 39Es ($3.3 billion or about $150 million each). The cost includes training, spare parts, technical support, and so on and amounts to more than the actual cost of the aircraft. So it’s no wonder Sweden is willing to move some of the aircraft production to the nation buying the aircraft and all the accessories.

There’s another reason for the Swedish move. The Swedish government was reluctant to spend billions to finish development of the JAS 39E. But the Swiss order made all the difference. As a result, earlier this year the government also agreed to let the Swedish Air Force increase its order for the JAS 39E jet fighter from 40 to 60. This decision caused some distress in Sweden, as the Swiss will be getting a lower price than the Swedish Air Force. Given the shrinking defense budgets these days, this sort of sales technique was necessary to get enough orders to make it possible to go ahead with the JAS 39E. It was only a year ago that the Swedish Air Force was allowed to build prototypes of the JAS 39E. This happened mainly because Switzerland expressed an interest in buying some.

The Swiss deal could still come apart, and that would likely kill the 39E, for the moment anyway. If that does not happen, the first 39E will enter service in 2018, and all 82 current orders would be delivered by 2027. This might change if more export orders are obtained, something the Swedes are hustling to accomplish. The Swedes have always had to scramble to sell the Gripen in the face of intense competition from new and used American (especially used F-16s), Russia, and European jet fighters. Currently, EADS, the manufacturer of the Eurofighter, is threatening to upset the Gripen deal by offering 22 second hand Eurofighters for half of what the new JAS 39Es cost. This sort of thing is possible because several nations are cancelling orders for Eurofighters, an aircraft designed at the end of the Cold War. With the Soviet Union gone, orders for Eurofighters were cut and continue to be cut. This has created a market for used Eurofighters, which compete with used F-16s. While the new Gripen may be more suitable to Swiss needs, a 50 percent discount is very attractive. The Swedes are now under pressure to sweeten a deal that may be getting too expensive for the seller.

Formerly known as the Gripen NG (Next Generation) fighters, the JAS 39E is heavier (17 tons) that the existing 39C, has better electronics, a heavier payload (over four tons), and has a two seater version better able to handle ground attack and electronic warfare duties. The Swedish Air Force already has 134 JAS 39Cs in service and the prospect of more defense budget cuts made the purchase of 60 Gripen NGs (at a total cost of nearly $5 billion) seemingly impossible. But the JAS 39E excited several export customers and that made all the difference.

Sweden is describing the 39E as a "new aircraft" compared to the earlier JAS 39 models. There's some truth to that, as the 39E is a little longer and heavier but still looks like a Gripen. The 39E is full of more expensive, and capable, electronics, but that's not obvious by just looking at the new model. The first 39E is expected to fly this year and enter service in 2018.

The Gripen has already undergone one major enhancement to the JAS 39C model. Improvements included inflight refueling, better electronics, and improved ground attack capability. The C model was also compliant with NATO standards for warplanes. This was necessary for export sales. There was also a two seat D model for training.

The 14 ton JAS-39C is roughly comparable to the latest versions of the F-16. The Gripen is small but can carry up to 3.6 tons of weapons. With the increasing use of smart bombs, this is adequate. Often regarded as an also-ran in the current crop of "modern jet fighters", the Swedish Gripen is proving to be more competition than the major players (the F-16, F-18, F-35, Eurofighter, Rafale, MiG-29, and Su-27) expected. Put simply, Gripen does a lot of little (but important) things right and costs about half as much (at about $35 million each) as its major competitors. More importantly, Gripen also costs about half as much, per flight hour, to operate. In effect, Gripen provides the ruggedness and low cost of Russian aircraft with the high quality and reliability of Western aircraft. For many nations this is an appealing combination. The Gripen is easy to use (both for pilots and ground crews) and capable of doing all jet fighter jobs (air defense, ground support, and reconnaissance) well enough.

The JAS 39 entered active service in 1997, and has had an uphill battle getting export sales. Sweden does not have the diplomatic clout of its major competitors, so they have to push quality and service. Swedish warplanes and products in general have an excellent reputation in both categories. Nevertheless, the Gripen is still expected to lose out on a lot of sales simply because politics took precedence over performance.




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