Indonesia Deepens French Defense Industrial Cooperation: Rafales Displace Su-35 Buy


By Pierre Tran

Paris – Indonesia ordered on Feb. 10, 2022, 42 Dassault Aviation Rafale fighter jets and missiles in a package worth $8.1 billion, with delivery of a first batch of six units in 2025, a French defense official said.

“The chairman and CEO of Dassault Aviation, Eric Trappier, and the Air Vice Marshal Yusuf Jauhari, Head of Defence Facilities Agency of the Indonesian Ministry of Defence, signed the contract for the acquisition by Indonesia of 42 latest-generation Rafale aircraft, at a ceremony held today in Jakarta,” the aircraft company said in a statement.

Meanwhile, French warship builder Naval Group signed on the same day a memorandum of understanding with PT PAL, an Indonesian state-owned shipbuilder, for industrial cooperation and opening a joint research and development center for a prospective local build of the Scorpene diesel-electric attack submarine.

The Indonesian Rafale order will go into effect this year when a down payment is paid, the defense official told reporters. The fighter deal is the result of 18 months of detailed talks following the signing of a letter of intent by the French and Indonesian defense ministers.

The French armed forces minister, Florence Parly, flew out for the contract signing, marking the importance attached to the fighter deal and the  significance attached to the Indo-Pacific region.

A major arms deal in the Indo-Pacific region could be seen all the more  significant in the wake of the Australian cancellation of a project to build 12 French designed Barracuda Shortfin conventional attack submarines.

That submarine deal would have been worth some €30 billion ($34 billion).

Indonesia will likely pay for the first batch of six Rafales from the some $600 million earmarked for buying the Sukhoi Su-35 fighter, business website La Tribune reported.

That deal with Russia was dropped after the U.S. warned such a purchase would put Jakarta in contravention of the Countering America’s Adversaries Through Sanctions Act.

That act went into effect in 2017, imposing U.S. sanctions against Iran, North Korea and Russia.

Indonesia had previously offered payment in palm oil, coffee and other commodities in exchange for 11 Sukhoi Su-35 fighter jets, when Russia was hit by U.S. and European sanctions in response to the annexation of Crimea, east  Ukraine.

Rafale deal

The Rafale deal includes aircrew training, logistical support of local airbases, and a training center with two full-mission simulators, Dassault said.

No details were available on the missiles in the deal. MBDA declined comment.

Trappier signed a partnership agreement with PPTDI, a local aeronautics company, for implementation of 10 projects in engineering, electronics, and the engines, daily Le Figaro reported. Such local offset deals will account for 85 percent of the contract. Le Figaro is owned by the Dassault company.

“Indonesian industry will benefit from a substantial industrial return, not only in the aeronautical sector, but also in all the other major areas of cooperation relating to the broad portfolio of dual technologies mastered by Dassault Aviation and its industrial partners, Safran Aircraft Engines and Thales,” the aircraft company said.

The Rafale deal comprises 30 single-seat and 12 twin-seat fighters at the F3-R standard, with an active electronically scanned array radar and capable of firing the Meteor long-range, air-to-air missile. The French air force flies that model.

Dassault has sold a total 471 Rafales, of which 279 were in the export market and 192 for the French air force and navy. Those foreign sales included second hand fighters previously flown by the French air force.

That makes a ratio of some 60:40 of foreign over domestic sales, compared to 50:50 for the Mirage 2000 fighter jet, which preceded the Rafale.

France sealed a notable arms deal with Indonesia in 2012, with the supply of 34 Nexter Caesar 155 mm 52 caliber truck-mounted artillery, with the €108 million deal financed by a bank loan.

That buyer’s credit allowed Jakarta to pay a 15 percent down payment and finance an 85 percent loan, backed mostly by French commercial banks. That bank loan ran for under five years and carried a lending margin below 200 basis points. A basis point is 1/100th of a percentage point and is keyed to official interest rates.

The Indonesian navy lost the KRI Nanggala 402 submarine April 21 2021, which sank with the loss of all 53 crew. The German-built boat had been engaged in a live torpedo firing exercise in the Bali sea, the BBC reported. The 40-year old submarine had gone through a refit in 2012.

Naval Group executive chairman Pierre Eric Pommellet signed the MoU with the Indonesian parter on local cooperation.

“Naval Group and PT PAL signed a Memorandum of Understanding seeking to leverage the capabilities of both partners to meet the growing requirements of the Indonesian Navy,” the French company said in a statement.

“Both companies are leaders in their markets and confirm their willingness to further increase their cooperation to provide solutions to meet the needs of the Indonesian Navy but also by opening a joint R&D center involving other Indonesian companies.”

Parly said on social media, “Indonesia announced the intention to buy two French-built Scorpene submarines. Indonesia is equally committed to cooperating with our industry in the domain of submarines.”

Dassualt Rafale of the Armée de l’air – French Air Force rotates from during Exercise Atlantic Trident ’17. Joint Base Langley-Eustis, VA. Credit: Murielle Delaporte