KUALA LUMPUR • South-east Asian governments are stepping up efforts to replace ageing fighter aircraft fleets, paving the way for multibillion-dollar deals in a boon for warplane makers.
Despite tight budgets across the region, sales executives say they are busier than ever after a five-year lull - and both industry and government sources say the next months could see several multibillion-dollar deals from Malaysia to Vietnam.
A trade conference held in Kuala Lumpur this week was full of would-be buyers and salesmen from Russian, French, British, Chinese, Pakistani and American firms. Attendees reported that the fair, held every other year, was busier than ever.
A prime drawcard was one of the region's biggest prizes: Malaysia, which is set to finally replace its Russian 1990s-era MiG-29 fighters after several years of delays. Industry sources say Kuala Lumpur could buy up to 18 jets, a deal potentially worth more than US$2.5 billion (S$3.4 billion).
Options include the Saab Gripen, Eurofighter Typhoon, Russian Sukhoi Su-30 and Sino-Pakistani JF-17. France is optimistic about winning an order for Dassault-built Rafales but other bidders are also hopeful.
"We are hoping to make Malaysia the ninth country to buy the Typhoon," said Mr John Brosnan, who heads the Asian business for BAE Systems, one of the partners in the Eurofighter consortium.
Malaysia's Defence Ministry did not respond to requests for comment on the talks.
Vietnam, eyeing options beyond traditional supplier Russia, is among those next on the buyers list. It has had preliminary talks with Saab and France's Dassault to purchase at least 12 fighter jets, said industry sources and a separate source familiar with the government talks.
"They seem to be keen on moving away from Russia, but it has been dormant so far," said Mr Kaj Rosander, regional director for Gripen exports at Saab. "It looks like the next call will be on Vietnam."
Industry sources say that Vietnam is also in talks with Moscow over several Su-35s. Officials at Rosoboronexport, Russia's arms export agency, declined to comment.
Vietnamese officials rarely comment on procurement matters, and did not respond to Reuters' requests for comment.
Meanwhile, Indonesia, which operates older Lockheed Martin F-16s, is close to an order for Russian Su-35s to supplement its Su-30s, according to industry and government sources.
While reluctant to comment publicly, officials in countries including Indonesia and Vietnam privately say that their renewed interest in new fighter jets is driven in large part by China's growing presence in the South China Sea, the heart of territorial disputes.
Chinese state media reported this week that a military plane had landed on Fiery Cross Reef, one of a number of new runways on reclaimed artificial islands, fuelling expectations that China will soon deploy fighter jets at the doorstep of many of the South-east Asian claimants.
"Rising tensions in (the Asia-Pacific region) have seen a long overdue process of military modernisation move up the political agenda in a number of countries," Mr Craig Caffrey, principal analyst at IHS Jane's, said in a report.
"The Philippines, Indonesia, Japan and Vietnam are all following China's lead and we see no sign of this trend coming to an end."
Beijing says it needs the facilities for self-defence and that the United States and others are militarising the region, not China.
REUTERS
