Honeywell’s high cost threatens Jaguar fighter’s engine upgrade

Future of four Jaguar squadrons uncertain as IAF puts project on hold

By Ajai Shukla

Business Standard, 22nd Jan 19

The plan to extend the service life of the Indian Air Force’s (IAF’s) Jaguar fleet, by equipping 80 of the fighters with new engines, is in trouble. Indian planners believe Honeywell, which is the sole vendor in the project, is demanding an exorbitant price to replace the Jaguar’s existing Rolls-Royce engines.

Hindustan Aeronautics Ltd (HAL), which is leading the project, has written to Honeywell protesting its “high and unacceptable quote”, which HAL says will “kill” the plan to re-engine the Jaguar.

IAF, HAL and Honeywell sources confirm the US firm has quoted $2.4 billion for 180 engines – which include 160 engines for 80 twin-engine Jaguars, and 20 spare engines. That amounts to $13.3 million (Rs 95 crore) per engine.

That has taken the cost of “re-engining” each Jaguar to a prohibitive Rs 210 crore, including Rs 20 crore per aircraft that HAL will charge to integrate the new engines in the fighter and to flight-test and certify them.

Business Standard learns that, given Honeywell’s high quote, the IAF has put on hold the next step of the Defence Procurement Procedure (DPP), which is to obtain the defence ministry’s “acceptance of necessity” (AoN) for the project.

The IAF currently has six Jaguar squadrons, comprising of 120 fighters. Only the 80 newest are getting new Honeywell engines, while the older 40 Jaguars will fly with their original Rolls-Royce engines until they retire in the early 2020s

If the “re-engine” project fails, all six Jaguar squadrons will retire. This would be a blow for IAF force planning, which counts on having four squadrons of “re-engined” Jaguars in service until 2035.

Contacted for comments, the IAF has not responded.

Business Standard has examined a detailed protest note that HAL sent to Honeywell this month, arguing that the US firm’s current $2.4 billion quote – which can be reduced to $1.9 billion by placing a consolidated order for development and manufacture – prices each engine at twice that of an earlier quote, submitted by Honeywell in 2013.

That quote was submitted when the plan was for Honeywell to supply 275 engines. That included 240 engines for all 120 Jaguars, plus 35 engines spare. For all these engines, Honeywell had demanded $1.634 billion, or just under $6 million per engine. 

HAL’s note to Honeywell points out that its current quote of $13.3 million per engine is more than double the 2013 quote. Even if a consolidated order were placed – which would bring down Honeywell’s cost to $1.9 billion, or $10.6 million per engine – that is still 75 per cent higher than the 2013 price.

In 2013, Honeywell was also responsible for integrating the F-125IN engines onto the Jaguar, flight-testing and certification, developing a new alternator to power the other aircraft systems and providing maintenance knowhow. The US firm had quoted an additional $2.1 billion for all this, taking the 2013 quote to $3.734 billion.

Given the unaffordability of this, HAL undertook to lead the project, assuming responsibility for integrating the F-125IN engine onto the Jaguar, and carrying out all the airframe modifications, aero analysis, flight-testing and certification that Honeywell was responsible for in the 2013 tender. While Honeywell had quoted $1.6 billion for this work in 2013, HAL has now quoted under $300 million.

Since Honeywell has not yet submitted a formal quote, it still has the opportunity to reduce its costs. The figures it has quoted are towards compiling a “rough order of magnitude” (ROM) cost, or a rough, ballpark figure for the IAF to obtain a green light from the defence ministry for the “re-engine” project. Honeywell’s high quote is forcing the IAF to rethink, but a revised ROM could set things back on track.

However, Honeywell sources tell Business Standard that, after years of delay and expenditure on the “re-engine” project, the company has concluded that the IAF is not serious about the contract and that it would serve no purpose to spend more money, resources and mind space on this.

Honeywell sources say they have spent at least $50 million, including on buying two old Jaguar fighters to physically integrate the F-125IN engine into those airframes. Another $50 million have been spent on expenses relating to the contract.

So exasperated is Honeywell that it insisted on charging HAL $73,000 for two visits by HAL officials in 2017 to its facility in Phoenix, Arizona to examine the integration work already done by Honeywell. The money also paid for a workshop for the ROM costing. “We will not spend a dollar more on this”, says a Honeywell executive.

Honeywell’s pessimism is also evident in the company’s decision not to participate in the Aero India 2019 show in Bengaluru in end-February.

The F-125IN engines, were India to order them, would be built in Taiwan by International Turbine Engine Company (ITEC), a joint venture between Honeywell and the Taiwanese government’s Aerospace Industrial Development Cooperation. ITEC builds the F-124 engine, which powers Taiwan’sF-CK-1 Ching-kuo fighter. The F-125IN is the same engine, with an afterburner to increase peak thrust. 

The Jaguar’s current Rolls-Royce Adour 804/811 engines deliver a maximum thrust of 32.5 KiloNewtons. In comparison, Honeywell’s F-125IN engines generate 40.4 KiloNewtons each, with full afterburners, providing it a significant combat edge.