Collaboration between Sweden and Switzerland on the new JAS 39E/F version of the Saab Gripen is expected to firm up in August with the signature of a framework agreement between Swiss defense procurement agency Armasuisse and Sweden’s defense export organization. That follows the signature of a ministerial-level letter of intent in Switzerland on June 29.
On the same day, Saab hosted a business-to-business meeting to start the process of placing offset work in Switzerland, in advance of a formal development contract that is expected in 2014.
Saab's head of Gripen export, Eddy de la Motte, said at Farnborough that customer interest in Gripen has never been higher. This is not surprising, for a few reasons.
First, the JAS 39E/F looks increasingly real, although a Swiss referendum precedes a full development contract. The initial operational capability date is set for 2018 by a customer and contractor with a strong record of meeting such targets.
The Gripen Demo's appearance at Farnborough with its new radar installed is an indicator of solid progress, and Saab has just been awarded a contract (fixed price) to support continued development work.
Second, the new Gripen is breaking Ernie Fitzgerald's Law, which states that the first things you hear about a new program are also the best things you will ever hear. The Farnborough presentation added a widescreen cockpit to the jet, and Saab has also started to talk about upgrade packages for JAS 39C/Ds.
Third (and most important) is that all air forces are finally realizing that operating costs are more important than acquisition costs. The debate over JSF costs - from the Navair leaks of 2010, through program director VAdm Dave Venlet's "it makes their knees go weak" quote in April 2011 to Lockheed Martin's recent assaults on the competence of Pentagon accountants - revolves around operating costs, and that is a fight that Gripen wins.Saab says that the E/F will cost under $5,000 per flight hour - one-third to one-quarter of its estimates for Eurofighter, Rafale or JSF (Saab uses Australian numbers for the latter, which are lower than some).
The more conservative Swiss estimate was half the cost per flight hour of the European twins - which may reflect Dassault or Eurofighter guarantees or different assumptions. Either way, the margins are huge.
Saab is not in a position to trumpet blue-sky estimates - because for a potential customer, the costs of a C/D are not hard to check, and because there is not that much all-new hardware on the JAS 39E/F. Airframe, systems, accessibility and design-for-maintenance are similar to the C/D. The engine has been in service for a decade and 1,000 of them are flying, and Selex Galileo radar modules are in full production.