First of all UK is selling there 3 year old to others not EADS... which means UK has already paid to EADS... and the report is saying it is a win-win situation because the orders they have placed will be diverted to Oman(which means new planes will go to RAF and older planes go to Oman).. so as to avoid the penalty charges failing to order the aircraft...
...So no way EADS has incurred loss nor UK because they have escaped the penalty which seems more than what they have sold to Oman...
RAF is selling their fighters, but so far is not has not ordered new once to replace them and so far it's also not clear if Oman will take the old once, or some new once of the initial T3B order of the RAF. Either way, that deal will bring the UK, no development costs in return, because they will be sold for the costs that the RAF would paid, or would pay, most likely even less!
The point is, there will be no new orders, where development costs could be added and even hardly 3 year old EFs will be sold for low costs, because RAF can't afford to upgrade, or maintain them. UK will loose a lot of money for sure and they can just reduce it, by diverting the T3B orders to other customers.
Btw, EADS is just a part of the consortium, not the EF manufacturer.
Dassault is not in a position to loose millions in Mirage2K upgrade.. thats why they have clear indication saying.. either you give this money or buy Rafale...
They don't have to, they know IAF loves the Mirage and wants to upgrade it and at the same time they are offering it's successor, which has a lot of fans in the Indian forces as well. There is simply no real need for them to give us a low cost upgrade. That has nothing to do with development costs, but with the fact that they prefer to sell us new fighters where they can keep benefiting for the next 30 to 40 years, instead of a simple upgrade for older Mirage for just 10 years.
That's also a reason why they didn't kept the Mirage productionline open and offered the Rafale later, because they new their chances in India are quit good. Not to mention that if we take Rafale instead of the Mirage upgrade, MMRCA is decided as well, because IAF would not add another fighter, that's why Dassault is offering 40 Rafales since 2008.
It's simply a business trick, to sell us the latest fighter and make more profit, but has nothing to do with development costs.
secondly you have to understand that MMRCA has a strict DPP ... they have to invest back 50% back into India.. If you are telling they will sell there Plane only at fly away cost.. they have to still setup the industry base and transfer the technology to India.. which will cost them more... they will not have any penny saved...
I highly doubt that we will see 50% offsets, that just the benchmark MoD placed to negotiate with the vendors, but be it Dassault, the EF consortium, or Boeing officials, they all said that this is not feasable. On the other side the French actually don't have to build up that much completelly new, because they already have several JV running with Indian counterparts in that regard. Samtel alone could provide the display, HMS and as it seems IRST of Rafale, not to forget that the Kaveri - Snecma, or Shakti engine deal for LUH are fields where offsets will be placed for sure, to GTRE and HAL. I also hope for Thales as a co-development partner for Tejas AESA, in case ELTA is not available, which then would be diverted to LRDE again.
I never said that they are selling Rafale only at flyaway cost, I said they might do it for the same flyaway cost they have and don't development costs on it. The systemcost, which includes training, spares and even some weapons would be way higher of course.
secondly there assembly will only manufacture 18 aircraft and incremently the full scale production will start in India ..in 3-4 years down the lane.. Most of the raw-material manufacturing will happen in India only... except some critical technology ... so where are they saving it?..
The 18 fighters will be fully produced in France, but even after that they will produce a lot of parts that will be assembled in India only. Look at MKI for example, the licence production started in 2004 I think, but the first fully produced MKI made by HAL came out only in 2010 only. So don't expect that the MMRCAs will be fully produced directly when the licence production starts. It will take years till HAL, or other Indian suppliers will have absorbed the ToT and production routines, to provide us with all the parts.