Manufacturers of perhaps the world's most powerful piece of military kit - the fighter aircraft - have never seemed so helpless.
If the UK government and Eurofighter interpreted the United Arab Emirates correctly, the Dassault Rafale now has at least one, and perhaps several, competitors for a major contract, after three years were wasted in exclusive negotiations. However, it is also possible that Eurofighter is playing the dupe and wasting resources and energy to support what some insiders see as a transparent, and probably futile, negotiating tactic by the UAE to force France to lower the price of the Rafale bid or make other concessions.
The UAE, of course, has every right to play the game. The Arab state is simply benefiting from one of the most distorted competitive environments in the defence industry. Most segments of the defence market struggle to offer even two eligible competitors for a sophisticated weapons system - but that is not true about fighters, where the competitive landscape in a shrinking market has reached absurd levels.
The UAE only limited negotiations to the Rafale since 2008 because of political interests, with France seen as a reliable counter to dependence on the USA for combat aircraft. If the UAE was to stage the broadest possible competition, it could receive up to 10 separate bids from six different countries, and that is not counting one or all of the three Lockheed Martin F-35 variants or a legally impossible F-22 deal. Amazingly, the fighter market could become even more saturated, with India, Turkey and South Korea to develop new products over the next decade.
This situation cannot go on forever, and indeed the signs of a great rationalisation of the fighter market are visible. At least one fighter production programme will be dropped when the last F-22 is delivered to the US Air Force in February or March.
Meanwhile, three countries - India, Japan and Switzerland - could sign major deals for new fighters within a few weeks. The results could drive the biggest losers out of the fighter business entirely.
The UAE is a shrewd negotiator in a buyers' market. Arguably, Dassault and Eurofighter need the deal more than the UAE needs to replace Mirage 2000-9s, which proved their capability in the air campaign over Libya.
The UAE is wise to wrangle the best deal it can get, but should move fast. They may not have such a strong bargaining position for very long.
■[This article appeared as the lead Comment article in the 22 November issue of Flight International]
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