Brazilian Air Force facing a ‘real’ slump

The so-called ‘Brazilian economic miracle’ is over, or was it only a mirage? Forced to face a major decline in their multiple modernization programs in the wake of Brazil’s drastic defence budget cuts – decided last year by the unpopular government of Mrs. Dilma Rousseff, now running her second term as president of the country and all the while facing impeachment in a widescale national corruption scandal – Brazil’s military is currently struggling to sort out what they can continue to fund, what can be delayed, and what must simply be abandoned.

Gone are the days of lazy and systematic federal over-expenditure thanks, in part, to large commodity exports to China, which have since collapsed. Current low oil prices on the global market have also hindered Brazilian exports of its expensive-to-pump off-shore production, adding more stress on the Latin American giant’s economy.

This situation is particularly affecting Brazil’s Air Force – the Força Aérea Brasileira (FAB), Latin America’s largest air arm. The FAB has historically been strongly linked to the national industrial base (large companies such as EmbraerAELAvibras, and Helibras and a number of smaller aeronautical companies), which means this fiscal collapse has serious indirect impact because it is contributing to the fragility of the FAB in an economic context. This financial problem is marked also with widescale social unrest, high inflation, and a 25% devaluation of the national currency – what some call the ‘real’ problem for Brazil.

As noted recently by Ricardo Ferraco, the President of the Brazilian Senate defence commission (Comissão de Relações Exteriores e Defesa Nacional): “the country must urgently review its policy regarding its defence budget, particularly concerning strategic projects, which cannot remain at the mercy of prevailing contingencies because, in the end, they are to compromise the sovereignty of Brazil.” And these impact the three armies, although at different levels.

‘M’ for modernization
A very professional force, built on the USAF model, the FAB is both an air arm and a social institution, providing significant paramilitary assistance to the remote populations of a country roughly the size of Canada. Even if the modernization program of the air force Embraer A-1 (AMX) fighter-bomber fleet continues as planned at Embraer’s Gavião Peixoto factory in the state of São Paulo, as well as some fine tuning of its Northrop F-5M fleet, turning the downward trend around remains highly dependent on a declining federal budget. For the time being, as far as fighter aircraft are concerned, the FAB can only rely on its A-1Ms (43 copies arming three squadrons) and F -5M (46 copies arming four squadrons). In the company of six dozen light attack A -29 Super Tucano aircraft arming some five units, they today constitute the bulk of the Brazilian air combat force, especially since the retirement in December 2013 of the Mirage 2000 (or F-2000 in FAB parlance) which had a very short seven-year career in defence of the Federal District airspace, although with a very high flight safety record.

Due to replace both the F-2000s and the F-5Ms, the Saab JAS 39 Gripen NG was selected by the FAB in 2014 against the Dassault Rafale and the Boeing F-15E Super Hornet. A total of 36 aircraft are to be procured from Sweden, 15 of them (including eight JAS 39F two-seaters purchased so far by Brazil) earmarked for assembly in Brazil by Embraer under a transfer of technology protocol.

Recently, during the recent Singapore air show, Saab’s head of marketing and sales for the Gripen, Richard Smith, described with emphasis the ‘huge technical transfer program’ associated with the Brazilian acquisition of the Gripen. Large offsets and a complete transfer of technology package were part of the deal between Brazil and Sweden. This includes 50 key projects in four industrial categories. Last October, the first 48 of an eventual 350 Brazilian engineers arrived in Sweden to work on the project, taking various positions in Linköping and using English as the common vernacular.

Northrop/Embraer F-5M
Still the backbone of the Brazilian Air Force (FAB) in 2016, the Northrop/Embraer F-5M is a modernized variant of the legacy F-5E updated with digital avionics and a new radar. A total of 46 aircraft equip four fighter squadrons. The “Tigres brasileiros” will be replaced by Saab JAS 39EBR Gripens during next decade. (FAB Photo: Sgt Johnson Barros)

While financing of the first tranche of twelve JAS 39 Gripen NGs seems firmly secured following a first down payment of some $200 million made to Saab in January through London-based Comissão Aeronáutica Brasileira na Europa, no one at this stage has been be able to confirm a firm date for the delivery of the first aircraft to the Brazilian Air Force, although this is said to be an ‘absolute priority’ by the FAB.

Presumably this should take place after 2018, as the important cockpit improvements required by FAB aviators (such as the ‘wide area display’ produced in-country by AEL Sistemas, using Israeli technology) as well as various adaptations of Israeli-made weapons to the aircraft, will obviously defer this delivery. In addition to slowing down the hand-out process, the ‘made in Brazil’ requirement is likely to translate to added costs for the F-X2/Gripen BR programme – the initial $4 billion deal for the new fighter has risen 20%.

Similarly, doubts still linger over the very slow pace at which the H225M Caracal medium transport helicopters for the army, navy and air force are being assembled by Helibras in Itajubá, with components and engines delivered from Airbus Helicopters and Turbomeca in France. Only 17 of 50 have been delivered so far to the three armies, and the program is already two years late. A positive note however, in early December while the Brazilian Caracal fleet celebrated its first 10,000 flight hours logged without incident, the naval version of this rotorcraft (or UH-15 in navy parlance) has been qualified for the launch of the AM-39 Exocet missile, a MBDA anti-ship weapon, which is also co-produced in Brazil by Avibras.

Meanwhile, as cash-strapped Brazil is making a huge effort to boost its air force with the new Gripen, a befogged future persists for the new and promising KC-390 jet tanker and cargo designed by Embraer to replace the FAB’s surviving C-130 Hercules, most of which were purchased second-hand from the Italian air force at the start of the century. Currently undergoing flight testing in São José dos Campos, the number one prototype (which made its maiden flight just one year ago) should be joined this year by a second prototype. This first KC-390 recently logged its first 100 flight hours achieved in one year of testing. Already, however, delivery of the first two series aircraft (out of a proposed order for 30 to be delivered over a 10-year period) has been postponed from 2017 to 2018, coinciding with the end of President Rousseff’s second term – thus passing the responsibility of providing more governmental support to Embraer and the KC-390 onto the next president.

For Embraer, the current indecision of the federal government on this issue is a vexing problem, as the KC-390 – for which international marketing will become Boeing’s responsibility under a partnership with the U.S. company – is the result of a significant international workshare with other countries (including Portugal and the Czech Republic).

Several air arms have expressed their intent to purchase the KC-390: Colombia for twelve copies; Portugal, Argentina, and Chile for six each; the Czech Republic for two; and Sweden is supposed to also acquire a few as part of the economic offsets for the selection of the Gripen by the FAB.

Recently, the KC-390 has been proposed to Canada as a replacement for its long-in-the-tooth fleet of CC-115 Buffalo SAR aircraft, used in that role since 1975. This seems a rather strange move taking into consideration the rugged conditions of the Canadian Arctic and the fact that the KC-390 is rather oversized and too costly to operate for just this specific purpose.

Having revealed declining annual results for 2015, Embraer unfortunately can no longer rely on more FAB credits to support its aeronautical program. In early March 2016, the FAB opted for the priority funding of the JAS 39 Gripen BR, an aircraft considered critical in strengthening the relationship with Saab (at the expense of the KC-390 freighter) knowing that the air force can continue to rely, for several more years, on its fleet of some two-dozen C-130/KC-130 Hercules.

The situation is even worse for other important FAB procurement programs. Faced with an absence of new orders and the cancellation of others by the Brazilian government, several second and third tier industrial partners of the FAB simply gave up last year, while others, who saw their sales decline, proceeded with large scale cuts of their work force. For instance, in early January, the Israeli company Elbit announced the closure of its Harpia Sistemas joint venture operation, conducted in cooperation between Embraer and AEL for the development of a “made in Brazil” drone system: the SARPS. Other companies that depend mostly or exclusively on orders coming from the FAB are preparing to do the same, laying off many employees in order to survive until better fortune.

It must be said that today in Brazil, with not less than 20 ministers of the Rousseff government currently subject to criminal investigations by federal police under the nationwide ‘Lava jato’ indepen­dent anti-corruption operation, the ‘climate’ between the government and the industry, including defence, is far from sunny – particularly since the announcement that the Tribunal de Contas da União (TCU, or GAO) refused to validate the government’s accounts for 2015 due to numerous financial irregularities, including suspicious movement of secret funds that may appear as ‘acts of corruption’.

In early March, the fire spread also to the direct entourage of former president Lula and influential members of the ruling PT-party – all suspected of having succumbed to large scale bribery to the tune of several million U.S. dollars. Meanwhile, due to a lack of funds to maintain and support them, the FAB had to stop flying much of its transport and ancillary aircraft fleet. A very sad situation for a country once so proud of the part it played in the history of aviation.

Jean-Michel Guhl is the Editor of Latinaero magazine.