The likes of Boeing, Dassault, Eurofighter and Saab assembled at LIMA 2015 may come away disappointed as it is almost certain now that Kuala Lumpur may not consider an outright purchase to replace its MiG-29N fighters.
Instead, a lease option has been mooted but its acceptance may depend upon the cost and terms of lease. Boeing and Saab are reportedly interested in this option but are less keen than an outright sale.
While the Malaysian MoD had decided as far back as 2009 to retire their MiG-29s due to troublesome performance and spares issues, they don’t have an urgent need for fighters and hence have been going slow as regards the MiG-29 replacement.
An industry source told Defenseworld.net in Langkawi ahead of the LIMA show that recent developments such as the finance package worked out for Egypt by the French government and Dassault has got the Malaysians “greatly interested. If they can get the Rafale as half its quoted price and the rest financed by French banks, you may be looking at a deal.”
In additions recent Russian aircraft such as the MiG-35 which are considered significant improvements over their predecessor models, besides the drastic fall in the value of the Rouble will get Kuala Lumpur talking to Moscow, even if it has had a bad experience with its MiG-29s.
Malaysian Defence Minister Hishammuddin Hussein has been stating in recent statements that current budgetary constraints do not permit big ticket defence procurement.
The reality is that the last 4-5 years of low defence spending has not increased the treat level to Malaysia. Incidents such as the Sulu rebels attack have shown that a quick reaction force and information sharing with neighbouring countries can be more effective than heavy weapons.