Evidence of meeting #38 for National Defence in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was aircraft.
A recording is available from Parliament.
Head of Eurofighter Export, Alenia Aeronautica
Yes, it's India's requirement.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
What timeframe is there for this particular competition in India?
Head of Eurofighter Export, Alenia Aeronautica
The prediction in that respect is quite difficult. We have experience from the Hawk acquisition, which took a very long time. What I can say is that we made the formal offer in 2008, and it had two years' validity. Within those two years we had a lot of discussion, assessment, and flight evaluations, but this was not enough. All six contenders had the opportunity of submitting a new offer this year with validity for another two years.
I reckon that the competition will last potentially for another 18 to 24 months. The current requirement is for having the first aircraft in India beginning in 2015.
Conservative
The Chair Conservative Maxime Bernier
Thank you very much.
I will now give the floor to Monsieur Bouchard.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Thank you, Mr. Chair.
I would like to go back to the economic benefits. If Canada chose your company, would you be willing to include a guarantee in the agreement providing economic benefits equal in value to the contract?
Suppose the value of the contract were $7 billion, would your company be willing to guarantee $7 billion in economic benefits to Quebec and to Canada?
Head of Eurofighter Export, Alenia Aeronautica
The answer is yes.
Maybe you can comment on the recent declaration by Austria.
Eurofighter Project Test Pilot, Aeronautics, Cassidian Air Systems
Austria was our launch export customer, and they received an offset of 200% on their airplane. Most of it has been realized already.
Vice-President of Political and Government Affairs, Aeronautics, Eurofighter
A couple of weeks ago the Austrian government accepted $2.3 billion in offset requirements from the Eurofighter consortium. There's more to come. This is for a 15-year contract.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Thank you.
One of your competitors has stated that they plan to build between 3,000 and 5,000 fighters. Your presentation mentioned 800. Is that the number of aircraft for which you have signed contracts? You mentioned 232 planes for the United Kingdom, and you mentioned planes in India. But how many planes are you committed to building and how many would you like to build?
Head of Eurofighter Export, Alenia Aeronautica
We have 620 aircraft ordered by the core nations, out of which 232 are for the U.K. and 129 are for Italy. Apart from this 620, we have 15 aircraft already delivered to Austria. We have 72 aircraft being delivered to Saudi Arabia. This brings the total to over 700. We are competing in other markets for an additional 800. I mentioned the 126, plus 63 for India. There is a requirement of 50 aircraft for Japan. There is a requirement for 48 aircraft in Romania. There are requirements of 22 to 33 aircraft in Switzerland. And there are other requirements in other nations in Europe. There is a requirement now emerging from Korea, where we are actively promoting the Typhoon. We've been active in Brazil. This 800 is a rough figure of potential export requirements. Malaysia is another potential customer.
Conservative
December 7th, 2010 / 4:20 p.m.
Conservative
Ray Boughen Conservative Palliser, SK
Thank you, Chair, and welcome, gentlemen.
When we look at all the countries that are purchasing aircraft, we find that the majority of those countries are purchasing the F-35. For several years it has been classified as the fighter of this century and the next century. It meets the requirements at a lower cost than most other aircraft being produced. Can you tell me why this picture doesn't sit well with other countries? It seems to me that this is the aircraft of choice, as attested by ten countries locked into that operation.
Eurofighter Project Test Pilot, Aeronautics, Cassidian Air Systems
The airplane is not quite finished yet, and it hasn't actually been sold in that many numbers. We know the business case. We know the numbers that are being told to us. Currently, I think we're talking about a few hundred airplanes. The U.K. has bought one or two. Holland has bought one. Those are the F-35s that have really been sold. We are all waiting anxiously to see how that program goes on. I think it would be wrong to say that they've already sold 3,000 airplanes.
Conservative
Ray Boughen Conservative Palliser, SK
It looks as if the sales may range from 3,000 to 5,000 aircraft, from what we've been told.
I'd like to pick up on a question of cost. In 2007 you sold Saudi Arabia 72 aircraft for $8.86 billion. That would come to about $123 million per aircraft. Last week we were told that the F-35 would cost $70 million to $75 million per aircraft in 2010 to 2002 dollars. So we're looking at $70 million or $75 million for the F-35 and $123 million for the Eurofighter. There seems to be quite a discrepancy in cost there.
Can you tell us about that?
Head of Eurofighter Export, Alenia Aeronautica
I cannot comment too deeply on the Saudi acquisition, because this was a government-to-government acquisition made by the U.K.
We as industry made our offer to the procurement agent of the U.K. government, and we really don't know what the final offer of the U.K. to Saudi Arabia consisted of. They may have added a lot of things on top of our basic aircraft that we are not aware of.
Conservative
Ray Boughen Conservative Palliser, SK
With all due respect, you're talking government to government when you talk about selling aircraft to Canada. You were saying you couldn't reveal dollars because you were talking—
Conservative
Ray Boughen Conservative Palliser, SK
—about country to country. I'm saying to you that you're talking to us, and that's country to country.
Head of Eurofighter Export, Alenia Aeronautica
The acquisition for Saudi Arabia was quite a peculiar one, because it was government to government. We only know part of the story, from an industry perspective.
In other competitions—and in particular those in Japan, India, Turkey, Romania—we are acting as the contractor of the product. The contract will be between Eurofighter GmbH or one of the partner companies and the local government.
Conservative
Liberal
Ken Dryden Liberal York Centre, ON
Just to reiterate things that I think you have said and then to ask about some other things, insofar as an apples-to-apples cost of the Eurofighter and the F-35 is concerned—and not on a government-to-government, but on an equivalency basis, and on the base airplane—what you have said is that you would be able to meet that cost, if not better it. Is that correct?
Liberal
Ken Dryden Liberal York Centre, ON
You also talked about industrial benefits and said that you are willing and able to guarantee at least 100% in terms of industrial benefits, and that this would be a guarantee. Is that correct?