Russia » Economics
Author`s name Ольга Савка

Brazil declines to sign $750 million deal to buy Su-35 fighters from Russia

Russia used to sign such contracts only with China and India

Vladimir Putin's visit to Brazil was supposed to end the long-standing tender connected with the delivery of Russian Su-35 pursuit planes to Brazil. “Our offer for Su-35 planes is the best from the commercial and technical point of view. The pursuit plane is designed in compliance with the requirements of the Brazilian Air Force. Unlike the competitors, we offer a complex delivery with all necessary equipment and adequate offset programs. The package also includes an opportunity for Brazil to participate in the production of Su-35 planes, their modernization and the post-sale servicing,” the general director of the Sukhoi holding, Mikhail Pogosyan told the Izvestia prior to Putin's visit to Brazil.

A signed contract with Brazil is an issue of strategic importance for Russia. The list of competitors in the Brazilian tender includes the French fighter Mirage 2000, the US F-16 aircraft and the Swedish Grippen. Brazil plans to purchase not less than 12 planes, although the order quantity can be extended to 24 and even 60 fighter planes in the future. The contract has been tentatively estimated at $750 million. It is worth mentioning that the price of the deal may exceed $1 billion taking into consideration the deliveries of additional aviation arms, the creation of a certain infrastructure and the technical servicing, or even the licensed production of fighters.

Russia used to sign such contracts only with China and India (there was an expensive contract conduced with Malaysia about 1.5 years ago, though). Brazilian military men's opinion of Russian Su-35 fighters is rather flattering, although the fate of the tender is rather vague.

The problem can be explained with offset programs connected with the delivery of the military hardware. Brazil is one of the world leaders on the production of civil aviation technology. Embraer liners are widely spread all over the world. The company rendered a serious support to the incumbent Brazilian president during the pre-election campaign; now it is expecting the president to pay the debt. For example, the plane maker would like the president to support its suggestions for the delivery of the fighter Mirage-2000BR, which Embraer produces in cooperation with the French company Dassault Aviation. In the event Brazil acquires Su-35 planes, the company would like to link it with a cross purchase of regional jets. The Sukhoi company, however, is undergoing preparations to launch the series production of the RRJ regional jet of its own. Embraer has built many planes (the now-bankrupt American company US Airways and the Swiss Crossair refused to buy them); it has the developed technical servicing network too. That is why, Embraer's appearance on the Russian market may lead to lamentable consequences both for RRJ and other aviation projects of the home aviation industry.

A new head of the Brazilian Defense Ministry appeared in Brazil shortly before the Russian president's visit to the country. A new person on the ministerial position became a good reason to explain the time lag with the deal pertaining to the Russian Su-35 fighters. Russian officials have not released any comments on the matter.

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