Market Analysis: Su-35 Export Potential
Sukhoi/KnAAPO primarily regard the Su-35 as an export product. They have estimated to produce at least 300 Su-35 fighters, which seems a bit optimistic considering the global fighter market with its complicated political factors and competitors. Potential customers have been known to include Brazil and various countries subject to (potential) US and/or European embargo including Venezuela, Syria and Libya. Because the Su-35 solely relies on Russian equipment, it should be able to easily compete for orders by these countries as almost all rivals contain US or European technology. Even its main rival the Irkut-built Su-30MKI features French, Israeli and Indian equipment.
Although China was reported to have threathened to offer the J-11B/BS Chinese-developed Flanker copies for export not too long ago, more recent reports suggest the Su-35 has been included in planned talks concerning further military cooperation with China. With China as a customer for the Su-35, the envisaged 300 aircraft might become reality.
But the most promising prospected buyer for the new Su-35 is Venezuela. Venezuela has expressed interest in the Su-35 to supplement its fleet of 24 Su-30MK2 delivered in 2006-2008, enabling the FAV to retire its ageing Mirage 50 fleet. Unless Venezuela decides to part with KnAAPO and invest in the development of a 'pure' Russian Su-30MKI derivative, the Su-35 will easily prove superior to Venezuela's only alternative; additional Su-30MK2.
Brazil is thought to had shortlisted the Su-35 (Su-27M) in its 2001 F-X program to select a future fighter for its air force. Postponed before completion and subsequently cancelled in early 2005, Brazil relaunched its tender for 36 new fighters in 2008, dubbed F-X2. Total requirement has been stated to be 120 aircraft to be delivered from 2014 onwards. Although considered in the first round of the selection process based on RFI comparisons, the Su-35 did not make it to the second round. This represents the first lost opportunity for the new Su-35. Brazil will make its final decision between Dassault's Rafale, Saab's Gripen Next Generation and Boeing's Super Hornet Block II next year.
Syria has been looking at new Russian weapons recently, including the Su-30MK2 and even the possibility of acquiring new-built MiG-31 air defense fighters. Moscow's recent arms export policy with regards to the Middle East only allows 'defensive' weapons to be supplied to Syria. Additionally MiG-29 upgrades seem to be higher on the Syrian agenda. Thus a potential order for new multi-role Su-35s still seems far away. Syria is also believed to be limited in funds, making the MiG-35 and Su-30MK2 more likely candidates.
Having restored its political ties with France Libya had expressed interest in purchasing a limited number of Rafales. Also the US aerospace industry is likely to enter the market with the expiring of the US embargo, whether this will lead to any US fighters being offered for sale remains to be seen. The country can certainly be considered as a potential buyer as the Su-35 is believed to be much cheaper than its Western rivals. However it requires a comparatively limited number of aircraft.
If the new Su-35 market unfolds like that of the Su-30MK multi-role Flankers, more potential customers are likely to emerge soon. But at this time, the potential market size for heavy Russian jets seems to be rather limited, which is perhaps one of the reasons why Sukhoi also wants the Russian Air Force to acquire Su-35s.
Domestic Market
Although Sukhoi considers the Su-35 as mainly an export product, plans have been revealed that call for a domestic version to be used by the Russian Air Force. The domestic version will of course feature local IFF, electronic warfare and communication systems. Interestingly the RuAF version will reportedly re-use the Su-37 designation [Butowski, 2008, p.55]. However as Piotr Butowski [2008] also pointed out, the Russian procurement budget for 2007-2015 does not provide funding for the acquisition of new fighter aircraft. Only provisions have been made for PAK-FA development and the Su-27SM upgrade program of the existing fleet of Su-27s, for which similar equipment as embodied in the Su-35 is being offered for the second stage, designated Su-27SM2. Having been introduced to the new Su-35 and also MiG-35, Putin suggested a revision of the defence procurement budget to include these new aircraft. At the moment it remains unclear whether this will materialize in orders for new-built airframes or just firm orders for the Su-27SM2 upgrade.
In addition to a proposed upgrade of the Russian Navy's Su-33 fleet based on the Su-27SM2, it is also possible that a proposal for a new-built ship-borne Su-33 variant will emerge based on the Su-35 as one of the options to equip the Navy's future carriers.