Bloomberg News

Saab’s Gripen Will Compete on Price Amid Budget Cuts, CEO Says

December 01, 2011

Dec. 1 (Bloomberg) -- Saab AB, which won a 3.1 billion Swiss-franc ($3.41 billion) order for 22 Gripen fighter jets this week, will keep competing on price to lure buyers as governments adapt to shrinking budgets, its chief executive officer said.

“There are many countries that have a need for fighter aircraft but they also want money to invest in other things, such as health-care,” Hakan Buskhe said in a telephone interview today.

Saab, based in Linkoeping south of Stockholm, edged out Dassault Aviation’s Rafale jet and the Eurofighter model to clinch the deal this week. The 1,320 mile-per-hour Gripen, which entered service in 1993, will replace Switzerland’s fleet of ageing Northrop F-5 Tigers. The Swedish manufacturer is competing for further orders in Croatia, Bulgaria, Brazil, Denmark and the Netherlands.

The Gripen is “a sensible solution, and with a budget that will remain under pressure over the coming years, we can’t always go for the top of the top,” Swiss Defense Minister Ueli Maurer said yesterday. “The Gripen is technically excellent.”

The purchase will cost about 3.1 billion Swiss francs, according to the Swiss government. Buskhe declined to disclose the price tag for the aircraft.

The Swiss success follows setbacks for the Gripen in recent years, after the jet was ejected from a competition in India, and Norway snubbed Saab for Lockheed Martin Corp.’s Joint Strike Fighter.

Saab fell 4.7 percent, to 114.9 kronor at 1:54 p.m. in Stockholm trading. The stock rose 11 percent yesterday.

--Editors: Robert Valpuesta, Andrew Noel.

To contact the reporter on this story: Sabine Pirone in London at spirone@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus