SAAB Wins One As Swiss To Buy Gripen

by: Matthew Potter
December 2, 2011

Category: Business Line, Companies, Military Aviation, production program | RSS 2.0

The major combat aircraft manufacturers are often dueling to win contracts from outside their home countries. Many of the contracts awarded go to primarily U.S. aircraft or Eurofighter, the consortium from Europe. That leaves smaller providers like France’s Dassault or Sweden’s SAAB who have only sold to their domestic arm forces scrambling for whatever deals they can find.

So far neither has been able to win a contract from an overseas customer. Dassault’s Rafale does remain a contender for India’s MMRCA contract expected to be awarded this month but it is in competition with Eurofighter’s Typhoon. Rafale is also still technically being considered by Brazil but that contract has stalled. SAAB was eliminated by India in the first round and Brazil has not given any indication that they are seriously considering their product.

Many NATO countries will be buying Lockheed Martin’s (LMT) F-35 Joint Strike Fighter as a replacement for the F-16 fleet purchased thirty years ago. This includes countries like the Netherlands, Canada, the U.K. and Australia that would have been long shots for the Swedish or French aircraft.

SAAB especially has been looking for a foreign sale as that country has almost completed its buy of aircraft meaning there would be no demand for it and SAAB would have to make cuts to its work force and capabilities. But now Switzerland has announced that they will buy the Gripen as a replacement for their elderly Northrop F-5 fighters.

The contract is for 22 aircraft and will also most likely include engineering and logistical support. The contract value is estimated at around $3 billion. SAAB has been very aggressive in marketing the aircraft and has offered good prices to its customers.

The contract will be a big blow to the French who had hoped to sell the Rafael to multiple customers and now really has only one left – India, although there are potential deals in the Middle East as well.

As domestic defense budgets get reduced these kind of contracts increase in value as ways to keep production lines going and workers employed. The competition for the remaining contracts will become ever more intense and cut throat.

Photo from Jerry Gunner’s flickr photostream.

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