PARIS --- While Taiwan is at the forefront of Chinese military maneuvers, many Southeast Asian states are facing China's territorial assertiveness and military build-up. Beijing is not only catching up on its historical delay in maritime capabilities, but also developing highly sophisticated platforms such as its fifth-generation fighter, the J-20.
In this situation, the region is witnessing a general increase in defense budgets, with procurement programs for fighter jets being at the forefront of the budgetary effort. In July 2020, in the midst of a pandemic, the sale of 105 F-35s to Japan, worth $23.11bn, was approved by the US State Department, making it the biggest F-35 contract in history. Regional powers like South Korea and Australia have also topped up their existing fleets with new orders. And more countries are next in line.
Fleets of F-16 are being upgraded to the F-16V standard in Taiwan and Singapore, and a similar program could soon be launched in Indonesia. Jakarta also recently made headlines with a deal for 42 French Rafale – still to be officially budgeted - and the US State Department's approval for a potential F-15 sale worth $14bn – still to be finalized.
Budgetary constraints limit smaller countries
Smaller countries have been faced with budgetary constraints, slowing down their procurement plans. Malaysia has been trying to replace its now retired fleet of MiG-29N for more than a decade, but suffers from budgetary constraints. The country however turned towards Light Combat Aircraft/Fighter Lead-In Trainer (LCA/FLIT) platforms with an ongoing tender for 18 jets, where competitors like Korean FA-50 Golden Eagle, Turkish Hurjet, Russian Mig-35 and Yak-130, Chinese L-15B Falcon, Indian Tejas Mk 1, and Italian M-346 are in the running.
But rather than giving a comprehensive list of all fighter jets modernization and procurement programs throughout Asia, one can look at the broader market prospects for the next few years to get a sense of the fighter jet momentum on the continent.
Market estimates point to growing needs
Boeing Defense, Space & Security recently forecast defense market opportunities worth $70bn over the next five years. Fighter jets will represent an important share of this amount.
Janes Defence Budgets anticipates that 32.4% of total defense procurement and R&D funding in Southeast Asia by 2028 will be spent on air forces. According to Janes Markets Forecast, the estimated total programme value for multirole combat aircraft (MRCA) acquisitions in Southeast Asia will reach $18.4bn between 2022 and 2031.
American and Russian fighters have long been favored by air forces in the region. According to the World Directory of Modern Military Aircraft, Indonesia’s fleet of multirole combat aircraft is composed of F-16s, Su-30s and Su-27s; Singapore’s has F-16s and F-15s, while Malaysia has Su-30s and F/A-18Ds, South Korea has F-16 and F-15 etc.
New regional offers are appearing
The latest developments on the Asian fighter jet market gave rise to a wider range of players, taking advantage of the trend towards diversification of military suppliers. New regional offers are emerging: for instance, the Malaysian tender for a new LCA saw India’s Tejas and, at one point, Pakistan’s JF-17 among the contenders (although the latter has finally been ruled out).
In 2008, Sweden’s Saab made a significant move by successfully placing six JAS-39 Gripen in Thailand. More recently, following a complicated acquisition process, Dassault finally delivered 36 of its Rafale flagship fighter to the Indian Air Force. Indeed, the French multirole fighter is gaining momentum in the region, with the Indonesian order for up to 42 Rafale placed earlier this year and potential future opportunities in the region, including the Malaysian future MRCA competition and the ongoing Indian Navy tender where it is pitted against Boeing’s Super Hornet.
For Boeing, boosted by the domestic F-15EX order book, the F-15 Eagle remains an option for regional powers who can afford it. Countries like Singapore, South Korea or Japan could be tempted to add some to their existing fleets if necessary, while former Su-30 users could see it as an attractive replacement or fail-over option. Finally, the European Eurofighter Typhoon is the only modern Western fighter that has not yet made it on the Asian market…
Russian offers are now suffering from the risk of US sanctions faced by potential buyers, as well as the dubious track record of their products in Ukraine - which ultimately gives a competitive edge to non-American players in countries eager to diversify their fleet.
Russian fighter jets are however still being sold, with recent orders of Su-30 from Malaysia. Rosoboronexport CEO A. Mikheyev claimed that five Asian countries had shown interest for the Su-57 jets while Vietnam and India have been identified as potential customers for the next-gen. Su-75 Checkmate.
Domestic production on the rise
Another trend in fighter jet procurement in Asia is the rise of domestic production. Out of Japan’s first batch of 42 F-35As, 38 are assembled locally by Mitsubishi Heavy Industries. The Indian Navy’s tender for 114 fighters is part of the “Make in India” policy, meaning the aircraft will have to be produced in the country. India who also intends to ramp-up domestic production of current and future fighters like HAL’s LCA- Mk1B and Mk2, Advanced Medium Combat Aircraft (AMCA), as well as Twin Engine Deck-Based Fighter (TEDBF).
Other types of partnerships for instance include financial cross-participations, as in the case of the KFX/IFX Korean future stealth fighter, which was partly funded by Indonesia (20%), in view of the future procurement of 50 aircraft. Beyond such partnerships, Japan, South Korea and India are also developing their own fifth generation stealth fighter, often based on foreign technology transfer from strategic allies.
These ambitions, however, are often hampered by budgetary constraints.
Sophisticated aircraft are hardly affordable to smaller nations, who need to find funding schemes to support their acquisition programs. In the Rafale contract, several reports indicate that Indonesia benefited from guarantees from the French government that the country would obtain a loan from French banks. Granting this type of payment facility could be the key to securing new markets for manufacturers in the region. The US is also proposing such schemes under the Foreign Military Financing, but the latter requires case-by-case Congress approval, which makes it less reliable for buyers.
In 2016 for instance, the Congress rejected the US contribution to a $700mn deal with Pakistan for the sale of F-16C/D fighters.
Are used fighters an option?
To face funding shortfalls, some countries have turned towards second-hand opportunities. The Royal Malaysian Air Force has shown interest in acquiring second-hand F/A-18C/D jets from Kuwait, as its multimission combat aircraft procurement program remains stalled by budgetary constraints.
Procuring second-hand fighters has nevertheless not been so common so far in Asia. This type of acquisitions may also be part of upgrade programs.
In September 2021, the Indian Air Force signed a contract for the purchase of 24 phased-out Mirage 2000 fighters from France, as part of the upgrade of its existing fleet of the aircraft. Some of them will be scavenged to secure parts for the IAF’s two squadrons of the fighter.
Despite this budgetary pressure faced by many Asian countries, there is a real need for their Air Forces to modernize their fleets, fueled by an intense Chinese military activity often perceived as aggressive.
The Philippines, who have repeatedly been confronted by Chinese incursions in their airspace, need to move away from capabilities tailored for counter-insurgency missions towards equipment better suited to air defense. Flight Plan 2028 displayed important ambitions in this sense, but budgetary constraints remain.
Malaysia’s fleet of Su-30MKM is plagued by sustainment issues, and Vietnam also urgently needs to modernize its air combat capabilities as its current fleet can only provide limited air superiority.
The overall picture is thus unequivocal for fighter jet makers, who will undoubtedly be looking eastwards more often in the coming years.