Sweden Sees New Chance To Sell Gripen to Finland
Nov. 2, 2014 - 11:00AM
By GERARD O’DWYER
http://www.defensenews.com/article/2014 ... en-Finland
HELSINKI — Sweden hopes Saab’s $5.4 billion Gripen-E deal with Brazil can open a dialogue with Finland, which is on course to replace its F/A-18 Hornets in the next 10 years.
Finland could engage in a further upgrade of its Hornets, but in reality there is “no other option” beyond acquiring a new combat jet type, said Finnish Defense Minister Carl Haglund.
Prospects for the sale of the NATO-compatible Gripen-E to Finland have been somewhat strengthened by cross-border bilateral talks to bolster defense cooperation. The two non-aligned Nordic states are discussing the possibility of establishing a joint fighter patrol unit to share costs and undertake air-policing responsibilities over their combined national airspace.
The potential savings to be gained by operating a common fighter aircraft were discussed between Haglund and his Swedish counterpart, Peter Hultqvist, in Helsinki on Oct. 10.
The serial incursions by Russian military aircraft into Nordic airspace, and the Kremlin’s muscle-flexing in the Baltic Sea area, underscore the need for a strong bilateral defense arrangement with Sweden, including an air-surveillance dimension, Haglund said.
Moreover, the conflict in Ukraine and heightened activity by Russian forces in the region has reinforced Finland’s need to build external defense relationships, Haglund said.
“Credible defense forces cannot be built all alone in today’s world. It requires cooperation at various levels with various actors. The Finland-Sweden cooperation is one of our important international partnerships and it must be accompanied by cooperation with Nordic states and other bilateral partnerships, including with the United States, NATO and the European Union,” Haglund said.
Neither Finland nor Sweden has disclosed if possible procurement collaboration would contain an industrial arrangement under which Finland would partner with Sweden to develop a common Gripen-E, said Arvid Paulsen, a Copenhagen-based political analyst.
According to Paulsen, the potential for the joint development of Gripen, and whether a common fighter type could be envisaged as a “serious proposition” going forward, will become clear once the armed forces of both states deliver their preliminary reports on practical cooperation later this year.
“These reports are expected by the end of November. The important political decision-making on bilateral defense collaboration is scheduled to start in February 2015, while the first concrete projects are expected to flow from April.
“As for Finland choosing Gripen, the present Finnish defense minister appears more impressed with the F-35 Lightning 11. How this may impact on Finnish-Swedish bilateral relations under the agreed framework will be interesting to see,” Paulsen said.
Total contracts within the framework of the existing Gripen-E project include the 60 to 80 combat jets ordered by Sweden on top of the 36 Gripen-NGs to be delivered to Brazil under the deal agreed between Saab and COMAER on Oct. 27.
Deliveries to the Brazilian and Swedish air forces are due to be completed in 2024 and 2026, respectively. By contrast, first deliveries to Finland’s fighter replacement program are not expected to take place until after 2025.
The next Finnish administration will need to prioritize defense spending and find the money to purchase new combat jets, Haglund said.
Finland is facing parliamentary elections in April 2015.
“We have an aging fighter fleet that needs to be replaced. In my view, there is no other option beyond new fighters if we wish to maintain a credible defense. We need to work from the premise that the acquisition will proceed. It will be a very costly project, but it is vital if we want to maintain our defense capability” Haglund said.
The Finnish Ministry of Defense is working to identify candidate combat jets and is scheduled to present its findings to the national parliament in May .
A provisional estimate by the MoD indicates that the acquisition of up to 64 combat jets and core systems to replace the Air Force’s F/A-18 Hornets could cost between US $7 billion and $8 billion. Finland is due to decide on a new combat jet type by 2019.
The speed at which Saab managed to find a new industrial partner in Brazil, following the collapse of efforts to sell 22 Gripens to Switzerland, bolsters Saab’s capacity to find new partners for the Gripen-E project in Europe, Asia and South America.
Possible partners include Finland and potentially Argentina, said Björn Enarson, a senior market analyst at Danske Bank in Stockholm.
“We should see increased export opportunities for Saab in the deal with Brazil. What the deal with Brazil does is guarantee Gripen’s survival up to 2050. This extended time frame has dramatically increased the probability for further export orders,” Enarson said.
Saab CEO Håkan Buskhe told an investors’ meeting on Oct. 23 that the group projected sales of 400 Gripen-E combat jets up to 2034. “This forecast remains unchanged, even allowing for the Brazil deal,” Buskhe said.
