Export bids for JF-17 Thunder Multirole Lightweight Fighter Aircraft

[SBD-3]

this ''least cost slogan'' is a sales pitch and i think the minister instead of concentrating on the words ''effective, capable'' stressed more on the word ''cheap'' or atleast was potrayed by the press like this

-- this price doesnt include weapons, training, spareparts and includes god knows what relatively downgraded avionics package so as to get some profit margin from it aswell in that meagre 25mil price tag

-- i doubt that the 'good' export variants would be under 25mil , considering the blk2 would roughly cost the paf in this range on a no profit/no loss basis

I was reading through a forum and came across an interesting openion which explained how JF-17 was able to offer this much in such a low price.
If we see JF-17's parameters, most of the avionics and weaponary was not developed from scratch. Most of the Avionics and Radar resulted from research done in J-10 Program. The CAC didnt reinvent the wheel. Moreover, the creation of AVIC synergized the research and development as the free market compitition structure like LMCO and Boeign where there is parallal R&D escalates costs as R&D spending is redundent and specialized. What differentiates AVIC from other rest is that while there is a compitition in final products between CAC and SAC, the technological development is centralized and multipurpose. The technology is not developed solely for J-10 or J-11B (Like boeign and LMCO do) the technology development is aimed at finding its way to all J-10, J-11, JH-7 and JFT. This results in not only technological development but also helps keeping costs considerably low. Case in point, there have not been parallal AESA developments in China but AESA capability and designs are adapted to be used in various platforms.

 

[Last Hope]

I would still be cautious on any export news, Only interest has been expressed.. NOT orders.
Looking at a product , asking around is different from actually going out and ordering it.

True. I just said if Nabil is right, then we got our first orders for 20 Thunders
Anyways, the evaluation is being done by 8-13 countries. In his statement, the ACM said that Thunder has potential to be sold to several nations and between 4000-5000 jets.

nabil_05 : is this news confirmed ? waiting for your answer
Qatar has placed an Oder for 20 JFTs!

He posted that in Dubai Air Show thread.

 

[Tempest II]

I was reading through a forum and came across an interesting openion which explained how JF-17 was able to offer this much in such a low price.
If we see JF-17's parameters, most of the avionics and weaponary was not developed from scratch. Most of the Avionics and Radar resulted from research done in J-10 Program. The CAC didnt reinvent the wheel. Moreover, the creation of AVIC synergized the research and development as the free market compitition structure like LMCO and Boeign where there is parallal R&D escalates costs as R&D spending is redundent and specialized. What differentiates AVIC from other rest is that while there is a compitition in final products between CAC and SAC, the technological development is centralized and multipurpose. The technology is not developed solely for J-10 or J-11B (Like boeign and LMCO do) the technology development is aimed at finding its way to all J-10, J-11, JH-7 and JFT. This results in not only technological development but also helps keeping costs considerably low. Case in point, there have not been parallal AESA developments in China but AESA capability and designs are adapted to be used in various platforms.

This is something I have been trying to understand and have debated a few times with some people. Here are some numbers:

2011 report reveals China manufacturing hourly labor rate, compensation costs impact EMS | VentureOutsource.com

China’s hourly manufacturing labor rates are far below rates in Japan ($27.80) and Taiwan ($8.68) but roughly on par with nations like the Philippines ($1.68).

Here 2010 Report: Global manufacturing labor rates, trends and competitiveness | VentureOutsource.com some 2010 numbers give $30.56 for the USA and a slightly different figure of $23.95 for Japan, but that is fine since they are different years.

For mass produced products the labour cost per hour is a smaller percentage of the total cost of the product. However, for producing 2 planes per month, the labour cost becomes a bigger percentage, and cheaper labour then impacts your product costs a lot more or cheaper labour becomes more important.

If we assume the above costs are likely to be for mass produced consumer goods, therefore "cheap" labour. Assuming specialised and skilled workforce will just pust both Western and Chinese cost.

There is also the margins expected by the Western companies that are floated on Wall Street vs PAF, AVIC or CATIC. I am also sure neither PAF nor CATIC has a management board full of millionaires, which, I expect to be the situation with Boeing, LM, SAAB, BAe or Dassault.

If you look at the complete supply chain, it will be logical to assume that for certain things, China has to meet the same costs as the West. Things like imported raw and even manufactured or semi processed components and commodities.

It is quite possible to produce a product/plane/FC-1 with the SAME PERFORMANCE AND QUALITY as a western product for a fraction of the cost given some of the above point.

Also from here: Reducing Costs in Aircraft: The Metals Affordability Initiative Consortium the factors identifed as contributing the largest cost are labour costs.

Typically, the engine(s) represent 20-25 percent of the acquisition cost of a jet aircraft; the largest cost factor is related to the engineering, fabrication, and assembly of airframe structure.

 

[Tempest II]

The ACM said they are still some improvements to be done. This in no way does not mean the plane is bad, just that they know they can do better, or they just need time. This also agree with what we know – which is that the PAF inducted the JF-17 when they knew and were still touching up on its sub-systems.
3rd party buyers (of which PAF is not a 3rd party buyer in this project) will likely wait either to place order or confirm until they see and test the Block II or Bock III plane.
Also, some of the countries listed like Sudan, Zimbabwe and Iran are under embargo. You know the pressure Russia got from trying to sell air defence systems to Iran. Neither PAF, CATIC nor the customer governments are prepared for this – they are not going to go for newspaper headlines. My view, for some of these countries, the only confirmation is when you will see the planes flying.

 

[SBD-3]

This is something I have been trying to understand and have debated a few times with some people. Here are some numbers:

2011 report reveals China manufacturing hourly labor rate, compensation costs impact EMS | VentureOutsource.com


Here 2010 Report: Global manufacturing labor rates, trends and competitiveness | VentureOutsource.com some 2010 numbers give $30.56 for the USA and a slightly different figure of $23.95 for Japan, but that is fine since they are different years.

For mass produced products the labour cost per hour is a smaller percentage of the total cost of the product. However, for producing 2 planes per month, the labour cost becomes a bigger percentage, and cheaper labour then impacts your product costs a lot more or cheaper labour becomes more important.

If we assume the above costs are likely to be for mass produced consumer goods, therefore "cheap" labour. Assuming specialised and skilled workforce will just pust both Western and Chinese cost.

There is also the margins expected by the Western companies that are floated on Wall Street vs PAF, AVIC or CATIC. I am also sure neither PAF nor CATIC has a management board full of millionaires, which, I expect to be the situation with Boeing, LM, SAAB, BAe or Dassault.

If you look at the complete supply chain, it will be logical to assume that for certain things, China has to meet the same costs as the West. Things like imported raw and even manufactured or semi processed components and commodities.

It is quite possible to produce a product/plane/FC-1 with the SAME PERFORMANCE AND QUALITY as a western product for a fraction of the cost given some of the above point.

Also from here: Reducing Costs in Aircraft: The Metals Affordability Initiative Consortium the factors identifed as contributing the largest cost are labour costs.

There are two important points that i would like to highlight
1-Cheap labor argument may help you in an industry where specialized talents are not required, but in specialized labor industries and capital intensive industry this leverage is not present. Aviation is an industry where you wont be able to benefit from cheap labor. Moreover Aviation is not a labour intensive industry but an industry which is skewed towards capital intensive nature. So you can not benefit from cheap labor argument in Aviation industry.
2-The product cost consists of two type of costs 1)Fixed cost (Development cost in Aviation) 2) Variable Costs (labor,materials etc). The term economies of scale holds that as the production expands, the fixed cost is spread over the production causing the final cost to decrease. Say if we have a 100$ development cost and 3$ variable cost and have to produce 10 units the per unit cost will be 13$ per unit but if we have to produce 20 then cost drops to 8$ and if the production goes to 100 then the cost is just 4$ per piece. Now one can guess why F-22 and B-2 are the most expensive aircrafts while JSF is much cheaper than them. So this also explains how a single development cost is spread by AVIC over the demand of different products. Like i said before, even for block II and J-10B, the certain technologies of J-20 and J-11B will be adapted rather then redevelopment.

 

[Donatello]

Whether confirm orders or not, the reality is that PAF needs its 250 jets before anyone else, as currently PAC is set up for that capacity only......

Let's see what happens.....is the new Pakistan Airforce Manufacturing complex, (i think they bought some land, like a year back) for the export orders???

 

[Tempest II]

There are two important points that i would like to highlight
1-Cheap labor argument may help you in an industry where specialized talents are not required, but in specialized labor industries and capital intensive industry this leverage is not present. Aviation is an industry where you wont be able to benefit from cheap labor. Moreover Aviation is not a labour intensive industry but an industry which is skewed towards capital intensive nature. So you can not benefit from cheap labor argument in Aviation industry.

What you are saying above is partly what I meant by this:

If we assume the above costs are likely to be for mass produced consumer goods, therefore "cheap" labour. Assuming specialised and skilled workforce will just pust both Western and Chinese cost.
.

In the chat below the blue is all about man-hours. If you can reduce that by 90% or even 75% you have cut a lot off your costs. Now this is just at at Chengdu. Think the same of the whole supply chain such that even your bought in material and sub-systems are cheaper too for the same reason where they are produced!
There is a good reason why the West spent billions moving manufacturing to China and there is a term LCC (Low-Cost Countries). What is clever and commendable is China and Pakistan making and selling high-value goods, that they own the design and rights to, thereby ripping the profits and benefiting their nations.

Maybe I was not clear enough but I did note that it is a different industry requiring skill so the costs quoted are not true for aircraft manufacture – I post them to show the “relative cost”. I.e. if unskilled labour in the US is 20 times that in China, then the skilled labour cost will be more along the same lines.
Concerning the estimate of how cost distribution of making a plane, see the above chart. I have posted this link Reducing Costs in Aircraft: The Metals Affordability Initiative Consortium and that is where the chart came from. Note that the material cost is small. It clearly shows and says the Engineering, the Fabrication and the Assembly make up the biggest chunks. All these three are about people spending many hours working. These three are about the cost per hour for your worker.

The above is real industry data and not me making things up or speculating or being “opinionated”

 

[SBD-3]

What you are saying above is partly what I meant by this:

Maybe I was not clear enough but I did note that it is a different industry requiring skill so the costs quoted are not true for aircraft manufacture – I post them to show the “relative cost”. I.e. if unskilled labour in the US is 20 times that in China, then the skilled labour cost will be more along the same lines.
Concerning the estimate of how cost distribution of making a plane, see the above chart. I have posted this link Reducing Costs in Aircraft: The Metals Affordability Initiative Consortium and that is where the chart came from. Note that the material cost is small. It clearly shows and says the Engineering, the Fabrication and the Assembly make up the biggest chunks. All these three are about people spending many hours working. These three are about the cost per hour for your worker.

The above is real industry data and not me making things up or speculating or being “opinionated”

But sir these are again have both fixed and variable costs attach to them (For example, Engine has its own fixed (development)+ Variable costs) so does subsystems. We also have to consider automation content in the manufacturing as well...But the link is an interesting read and i am looking into it though i am an economist

 

[BATMAN]

I would still be cautious on any export news, Only interest has been expressed.. NOT orders.
Looking at a product , asking around is different from actually going out and ordering it.

CATIOUS for what... what have we got to loose otherwise?

Whydo you think PAF is aggressively marketing JFT?
If still you don't see it coming, than i can only advise you to come out of this state of unbelief and denial.

Did it never occured to you that PAF was never in a position to honor any order, even if it had one!

Reality is that there is a long list of states which are walking around PAF with orders but unfortunately, production is hardly enough to cater to Pakistan's own needs.

My dear, Pakistan is a trustable name as a defence equipment supplier..... and JFT is very viable option.... against any bird out there, when it comes in double the numbers at the same cost.

You are welcome to share any counter statement from the listed states.. but please not your own assumptions, specially when trustable members are endorsing the news.

 

[Last Hope]

CATIOUS for what... what have we got to loose otherwise?

Whydo you think PAF is aggressively marketing JFT?
If still you don't see it coming, than i can only advise you to come out of this state of unbelief and denial.

Did it never occured to you that PAF was never in a position to honor any order, even if it had one!

Reality is that there is a long list of states which are walking around PAF with orders but unfortunately, production is hardly enough to cater to Pakistan's own needs.

My dear, Pakistan is a trustable name as a defence equipment supplier..... and JFT is very viable option.... against any bird out there, when it comes in double the numbers at the same cost.

You are welcome to share any counter statement from the listed states.. but please not your own assumptions, specially when trustable members are endorsing the news.

Not to mention, we will have pre-payment of between 30-50% and build facilities other than Kamra to cope with the orders.
Pakistan cannot export the Thunders till 2013 as the deal with China says.

 

[Cool_Soldier]

JF-17 started is serial production in mid 2009.In so short time it developed gradually and various weapons been installed.Many interested countries are looking in to it keenly.JF-17 block 2 is coming in to production from next years.

For any fighter plane its just a short time.In this short time, JF-17 got really big fame around the world.
No worries if no order is placed yet.It will be with time.

Rafle example is notable, even its good fighter but no order yet.

 

[Cool_Soldier]

Every one knows we are damn busy to complete our own order and extra changes in weaponry installation according to our needs.

 

[Windjammer]

CATIOUS for what... what have we got to loose otherwise?

Whydo you think PAF is aggressively marketing JFT?
If still you don't see it coming, than i can only advise you to come out of this state of unbelief and denial.

Did it never occured to you that PAF was never in a position to honor any order, even if it had one!

Reality is that there is a long list of states which are walking around PAF with orders but unfortunately, production is hardly enough to cater to Pakistan's own needs.

My dear, Pakistan is a trustable name as a defence equipment supplier..... and JFT is very viable option.... against any bird out there, when it comes in double the numbers at the same cost.


You are welcome to share any counter statement from the listed states.. but please not your own assumptions, specially when trustable members are endorsing the news.

BATMAN, what the honourable gentleman is implying is that indeed there are several potential buyers and I can confirm that but they are all in negotiations for their requirements and off course delivery timetable. Currently PAF has it's hands full, hence let's wait until a contract for an order is in place.

 

[SQ8]

CATIOUS for what... what have we got to loose otherwise?

Whydo you think PAF is aggressively marketing JFT?
If still you don't see it coming, than i can only advise you to come out of this state of unbelief and denial.

Did it never occured to you that PAF was never in a position to honor any order, even if it had one!

Reality is that there is a long list of states which are walking around PAF with orders but unfortunately, production is hardly enough to cater to Pakistan's own needs.

My dear, Pakistan is a trustable name as a defence equipment supplier..... and JFT is very viable option.... against any bird out there, when it comes in double the numbers at the same cost.

You are welcome to share any counter statement from the listed states.. but please not your own assumptions, specially when trustable members are endorsing the news.

Those on your trust list that is..
I make no assumptions, I confirm what I hear from the members I trust.
And since I have no confirmation of CONFIRMED orders, Ill stick to my statement.

 

[PakShaheen79]

mujhay koi price batay ga???

i think it is impossible to tell the price of a fighter jet in exact terms. It all depends on the customer requirement along with many other elements included in a deal like life-cycle cost, TOT or NOT TOT, spare, maintenance, weapons integrations etc etc. Basic price of baseline fighter must be around 18-20 Million US dollars.