Procurement: Iraq Offers Oil For Rafales

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August 13, 2022: Iraq wants to buy 14 Rafale fighters from France. These will cost at least $100 million per aircraft and Iraq is offering to pay in oil, not cash. Iraq will also accept used Rafales. Iraq is not alone. The growing threat from Iran has made it easier for France to sell a lot more Dassault Rafale jet fighters than anyone expected. Increased Iranian and Chinese aggression expedited and escalated sales to Arab states, India and Indonesia.

For Iraq, the need for Rafales is different. Currently Iraq needs new fighters because its current fighter force consists of 34 F-16 fighters and Iraq has been unable to keep them flying because of a shortage of spare parts and maintainers. The spare parts shortage is because of corruption, where much of the spare parts money is plundered by larcenous politicians. A more immediate problem is a lack of maintainers. Most of them are foreign contractors who left the country in 2021 because the Balad airbase where the F-16s are has experienced a growing number of attacks from Islamic terrorists. This lack of security led the foreign contractors to leave and they won’t be back until Balad is safe. Apparently the Rafales will be based elsewhere and the contract maintainers will be more willing to work in a combat zone. Much of the violence against Balad was caused by local Islamic terrorists or Iran-backed groups that want American forces out of Iraq. The French are seen as just another bunch of foreign specialists, who are common in the Iraqi oil industry. As a bonus France will sell advanced air-to-air missiles for these Rafales that the U.S. refused to provide for the F-16s.

Meanwhile, the Rafale has become a hot export item, especially in the Middle East. As of 2022 Rafale is closing in on 500 sold, most to export customers. This means Rafale is likely to match or even exceed the sales of the Eurofighter Typhoon.

The problem with Typhoon is dependence on the original European customers, who comprise over 80 percent of sales. Despite the increased threat from Russia, Typhoon sales in Europe have not increased. New fighters for European states tend to be the American F-35s. Overseas Rafale is getting a lot of the export sales that Typhoon might have had if Eurofighter had been as aggressive and flexible as Dassault. Rafale can operate from carriers and costs less than Typhoon. Dassault has been working in the Middle Eastern and Asian markets for nearly two decades. That persistence pays off in these markets, something Eurofighter realized too late.

Typhoon was developed and built by a consortium of the largest European defense firms and was a replacement for the Cold War era Tornado fighter, which was a contemporary of the Su-27, F-15 and F-16. Typhoon development began in the 1980s and first flight was in 1994, after the Cold War unexpectedly ended. This reduced the urgency to get Typhoon into service, which didn’t happen until 2003. The Typhoon turned out to be a pretty good warplane and this was discovered early on. The future looked bright but competition from American and Russian fighters for export sales and the lack of European enthusiasm for more purchases dimmed sales prospects. Typhoon got into combat in 2011 over Libya and performed well, but the demand from export customers and local ones was just not there. A sale to Qatar was important to the Europeans.

Dassault was more patient than the Eurofighter consortium. This was demonstrated when Egypt sought to buy another twelve Rafales after receiving the last of the 24 it had ordered in 2015. The French Finance Ministry looked at the Egyptian economy and eight billion dollars’ worth of French weapons Egypt had ordered since 2014, and expressed concern about the Egyptian ability to handle any more debt and pay for another billion dollars’ worth of Rafale fighters. French politicians, eager to get the sale, pointed out that Egypt had new natural gas deposits and their economy was growing at 6 percent a year. Egypt had better relations with Israel and Saudi Arabia, which had helped finance some of the French weapon’s debt. The first 24 Rafales cost nearly $6 billion, but that included establishing training and maintenance infrastructure for Rafales so more sales would increase the chances that Rafale would eventually replace many of older Mirages and F-16s Egypt has been using. By buying more Rafales Egypt would be able to provide maintenance and upgrade facilities in the region, lowering costs for other Arab Rafale users. The Finance Ministry agreed to withdraw its objections. The prospect of selling more Rafales to Middle Eastern nations, including Qatar, which is at odds with its fellow Arab oil states over how to deal with the growing Iranian threat, becomes easier with Egypt as a major Rafale user.

Egypt received its first 24 Rafales a few at a time, providing an opportunity to train pilots and support personnel. The first three arrived in July 2015, four months after Egyptian pilots and maintainers arrived in France for training. The Egyptian Rafales required a few modifications, mainly the removal of the hardware and software required for the aircraft to deliver nuclear weapons, as well as NATO communications equipment. This was replaced with what communications gear is currently standard in Egyptian warplanes (largely F-16s). Egypt wanted to receive all 24 Rafales before considering ordering more so France completed delivery by 2017. The manufacturer said it could be done and it was. As expected, this helped obtain more export sales from nations eager to upgrade their air forces.

Egypt has a long history of buying from the French and in 2015 had about a hundred Mirage V’s and Mirage 2000 fighters in service. These two predecessors to the Rafale had served the Egyptian air force well, seeing action most recently in the 2014 bombing of Libya. But these Mirages were getting old and would have to be retired by the mid-2020s. Egypt has a large force of American F-16s, but the U.S. has lots of rules that prevent some countries from buying more and the rules change all the time. France is less judgmental when it comes to selling warplanes and demonstrated that in Egypt.

The UAE (United Arab Emirates) was hesitant at first and that first sale to Egypt was needed to encourage others to buy an aircraft that has not been selling well. After 2015 Egypt more than doubled its original order, to 54 aircraft. The UAE now has 80 on order and Qatar ordered 36. At one point India might have ordered 128 but local politics reduced that to 36, which may well more than double because an Indian made fighter has proved to be a failure and Dassault stands by ready to help with that. That readiness to make deals was key to Indonesia ordering 42 Rafales. The French air force and navy only ordered 180 Rafales, a quarter of those going to the navy because Rafale was designed to also operate from aircraft carriers.

Rafale costs at least 20 percent less than a Typhoon. Its design was based heavily off the Mirage 2000 and, like most other Dassault fighters, it has a delta-wing configuration. Rafale has a maximum speed of 2,130 kilometers an hour and a range of over 3,700 kilometers. It is equipped with a 30mm cannon and can carry nine tons worth of weapons. It is a battle tested aircraft that has already seen service with French Forces in Afghanistan, Mali, Libya and Iraq. Development began in the 1980s, with the first prototype flying in 1986. At that point Rafale was to enter service in 1996. The end of the Cold War in 1991 disrupted those plans and an improved Rafale design entered service in 2001.

Until 2015 export buyers for the Rafale were scarce. The Rafale was up against stiff competition from Typhoon, Swedish Gripen NG, American F-18E and Russian Su-30. In 2013 Brazil passed on buying the Rafale and instead went with the cheaper Swedish Gripen NG.

France has had nothing but hard times trying to find export customers for Rafale and that had consequences. In 2009 the production rate was reduced from 14 a year to 11 and that was further reduced later. This was to slow down the delivery of Rafales, mainly because the Defense Ministry has decided that other things were more important. The new emphasis (and spending) was on peacekeeping and anti-missile defenses. Another reason for slowing down Rafale production was lack of export orders. Since 2015 production has increased and the manufacturer points out that it has the capability to increase production quickly. By late 2017 over 170 Rafales had been built and over a hundred more were on order. Five years later and sales had nearly doubled and now approach those of Typhoon, something no one ever expected. Rafale production will continue through the 2020s, when the older Rafales will need refurbishment and upgrades.

 


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