Thursday, November 10, 2011

MMRCA, is a 5% price difference irrelevant ?

Following the rumors about the 2 bids that were opened last Friday November 4th, lets speculate a little bit.
It is said that both bids are very close to each other with the Rafale about 5% cheaper. Although this difference may seem insignificant at first glance, it's still a quite large amount of money considering the unit price of a jet and the quantity bought by the IAF.

With a total order of 126 fighters, those 5% represent the price of 6 Rafale. That means that for the same price, you can either get 126 typhoon or 132 Rafale. It's as if Dassault was giving an additional plane for free for each squadron of 20 planes... nice :)

Now, if we estimate that the unit cost of the Typhoon is $100 million and the Rafale $95 millions (5% less), The total cost difference for 126 airframes reaches  $630 million which represents no less than 700 mica missiles (given a mica price at  $0.85 millions)

In this perspective those 5% start to make sense : Either you get 6 more airframes, or you can get enough BVR missiles to equip your entire MMRCA fleet (6 missiles per aircraft)...for free.

Yet, it also works the other way if the typhoon is the cheapest (as reported by Deccan Herald) ;)

1 comment:

  1. Just want to know if TOT is involved in Rafale's offer to UAE ?