Logistics: True Cost


December 10, 2017: Hungary has been trying to sell off its fleet of 24 MiG-29s for the last six years, without much success. For example in November Hungary tried to auction off sell 23 decommissioned MiG-29s, complete with engines, at a starting bid (price) of $18 million for all the aircraft plus 20 spare engines, an unspecified number of missiles integrated into the MiGs, 293 pieces of associated support equipment, and 1,251 spare parts. Sounds like a real bargain. None of the potential buyers agreed.

The auction failed because none of the qualified (legally able to own Mig-29s) bidders was willing to pay the minimum bid of what came to less than $800,000 per aircraft. This was not first attempt to auction off these MiGs. A previous attempt offered the same package for $43 million. It was believed that drastically reducing that minimum bid would work. The main problem was not the price but the main requirement was that the transaction needed to be approved by Russia as they are the original equipment manufacturer. This meant, unless Russia was willing to change their standard terms that all spare parts, upgrades and factory level maintenance had to be provided by Russian approved firms. That usually means Russian suppliers and no recourse if the customer is unhappy with the high cost, low quality and late delivery of these items and services.

Sometimes Russia is willing to negotiate exceptions to these standard terms. That was not the case with Hungary, which was on bad terms with Russia and not willing to negotiate with someone it did not trust. As a result of these onerous terms all Hungarian MiG-29s were retired in 2010. This was a logical thing to do because at that time only four were operational and these four were quickly sold to an undisclosed neighboring country. The remaining aircraft last flew in 2010 and their current operational status is unknown. Some of the MiG-29s were stored out in the open for years at Kecskemet Air Base in Hungary.

Hungary received 28 MiG-29s in 1993 as a payment for $800 million Russia owned. That comes out to approximately $29 million per aircraft, each with about 14 years of service left in them. But Hungary found the aircraft expensive to maintain. Despite the cost, half of them were refurbished to extend their service life. Since then, two of the standard variant aircraft crashed and others were cannibalized for spare parts. After Hungary retired its MiG-29s in 2010 they looked around and bought Swedish Gripen fighters in 2016. The Gripen is comparable to the MiG-29, more reliable, easier to operate and much cheaper to maintain. The Swedes have a long tradition of reliability and adhering to terms of any contract.

But not everyone is fed up with the MiG-29. Although many nations (most recently Czech Republic, Hungary, Romania and Moldova) have retired their MiG-29s, Serbia has been eager to acquire them. That's because Serbia is broke and Russia is providing them with subsidies for military equipment. There is also a diplomatic price Serbia has to pay (acknowledge Russia as its patron and so on). Russia is giving Serbia six MiG-29s and has persuaded Belarus to provide another eight freebies. These 14 Mig-29s are not free because Serbia is required to overhaul the “free” MiG-29s using Russian suppliers and paying the usual Russian prices. Many Serbs opposed this deal but Serbia needs a powerful patron and only Russia was willing to step up, for a price.

NATO member Bulgaria is also looking to upgrade its current fleet of MiG-29 aircraft in the near future and appears to be getting the same treatment as Hungary. Other nations are backing away from MiG-29s because of reliability and durability problems. Several times in the last few years, Russia has had MiG-29s grounded because of crashes and suspicion that there might be some kind of fundamental design flaw. All aircraft were eventually returned to flight status. This has not helped sales, and most export customers prefer the larger Su-27 (and its derivatives like the Su-30).

The MiG-29 entered service in the Soviet Union in 1983, as the answer to the American F-16. Over 1,600 MiG-29s have been produced so far, with most (about 900) exported. The biggest customer, India, received its first MiG-29s in 1986, with deliveries continuing into the 1990s. As the major export customer India has been able to force Russia to back down on their usual support terms. This was not easy, but India has long been a major customer for Russian weapons and always pays (unlike many other buyers of Russian weapons). Despite this a growing number of Indians want to drop Russian as a weapons supplier and switch to more reliable (usually Western) ones.

The 22 ton aMiG-29 is comparable to the F-16, but significant capability differences are noticeable between the respective variants of each aircraft. Compared to Western aircraft, like the F-16, the MiG-29 is available for action about two thirds as often. Despite any challenges, the MiG-29 remains as one of the most formidable combat aircraft currently used in multiple air forces around the world. But you must be willing and able to pay what is demanded to keep them flying. – Ryan Schinault




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