On 25 January, France and Greece finalised the purchase of 18 Rafale fighters for the Hellenic Air Force in a 2.5bn contract, marking the first European export of Dassault’s Rafale. The new fighter aircraft will replace the Mirage 2000. Expected to start between June to August, the delivery period for six new and 12 second-hand Rafale aircraft will last two years. Maintenance will also be provided by Dassault Aviation in a logistics support contract, spanning four and a half years.

Vera Lin, Associate Analyst at GlobalData, comments: “The aircraft acquisition demonstrates Greece’s commitment to upgrading air strike capabilities in the wake of its dispute with Turkey over national airspace and maritime boundaries in the Aegean. France’s political relationship with Greece, supporting Greece’s claims and rallying the European Union states to sanction Turkey, has opened a window of opportunity to support the French defence industry. Taking the opportunity, France will also propose the Belharra/FDI frigate, paving inroads for major domestic defence contractor Naval Group into Greece’s frigate modernisation programme.”

Rafale exports have been noticeably small when compared to its competitors the Eurofighter Typhoon, the F/A-18 Super Hornet, and the F-16. The Rafale fell short in the 2018 Belgium bid where France offered a strategic and economic bilateral package that will give economic returns of 100% the purchase price, along with the creation of approximately 5,000 high technology jobs, compensating almost 20bn. Ultimately, the Rafale and the Eurofighter Typhoon were passed over for the F-35 Joint Strike Fighter. No other vendor had proposed the same level of industrial cooperation, which gives question to the lack of competitiveness of the Rafale in the export markets, even when accompanied by an additional economic package that outstrips other offers.

Dassault’s Rafale has successfully won contracts for Egypt, Qatar, and India, with the Modi government currently mulling the French Government’s offer to increase Rafale orders for an Indian manufacturing line, aligning with Modi’s ‘Make in India’ programme. Small batch orders for the Rafale keep the manufacturing scale small, so the Rafale does not benefit from economies of scale. A key differentiating factor in market competitiveness is the price. According to the 2016 Indian contract, the estimated unit price of the Rafale is 92m ($104m) while the F-35 outprices it with a unit approximately valuing 70m ($80m) as of 2016.

Rafale’s contract prospects include Indonesia, Switzerland (Air 2030 modernisation programme), and Finland (HX Fighter). A potential Indonesian deal of 48 Rafale aircraft would make Indonesia the largest foreign Rafale operator and a breakthrough for the largest volume of Rafale exports made by Dassault to date. The procurement process for the Swiss and Finnish programmes is still ongoing, as Dassault competes against Boeing (F/A-18 Super Hornet), Lockheed Martin (F-35), and Airbus (Eurofighter) with the addition of Saab (Gripen) for the HX Fighter programme.

For Switzerland, preserving sovereignty and autonomy in operations is a key requirement. The Eurofighter bid has taken this into account in Airbus’ media release published on 18 November 2020, stating: “Switzerland will gain full autonomy in the use, maintenance, and application of the data from its aircraft.”

The F-35 bid does not offer the same amount of autonomy as the Eurofighter’s bid or potential industrial cooperation, which bodes well for Rafale’s market competitiveness as the French are unlikely to place restrictions to Swiss industrial participation.

The Finnish HX Fighter programme has highlighted the importance of deep-strike capabilities and unhindered operations in harsh weather and low temperature for surveillance, reconnaissance, air offence and defence operations. The second deciding factor will be the level of industrial cooperation for the development of local industry in maintenance and repair. The Saab, Dassault Aviation, and BAE Systems bids have offered industrial cooperation programmes with local industry maintenance, sustainment facilities and control over the security of supply. The Eurofighter also offers Finland ‘full sovereign control’ over defence capabilities. The F-35 is leagues ahead in terms of technology in stealth, deep-strike, and surveillance. However, it is logistically more difficult for Lockheed Martin to match the level of autonomy given in competing bids.

Lin continues: “Boeing has yet to disclose the details of its sustainment and training programme, although the acquisition of the F/A-18 Super Hornet and Growler will be cost-effective for existing operating and maintenance personnel as a relevant upgrade from the current F/A-18 Hornets. Both countries are expected to announce the winning contractor this year. Rafale’s current prospects during the Covid-19 pandemic may depend on a country’s own priorities, whether the accompanying economic benefits of France’s Rafale bids such as potential technology transfer and industrial cooperation can outweigh the F-35’s technological advantage and operational capabilities.”