Bloomberg News

Saab CEO Says Chance of Brazil Jet Order Boosted by Switzerland

March 15, 2012

Saab AB (SAABB) has a better shot at winning Brazil’s pending order of 36 jet fighters after Switzerland tentatively selected the Swedish company’s Gripen plane last year, Chief Executive Officer Hakan Buskhe said.

Switzerland’s nod to Saab in November “strengthens our chances” in Brazil, Buskhe said today in an interview in Stockholm. “We have a good chance and we’re realistically optimistic. We have a very strong offer, but in the end this is a political decision.”

Brazil told Saab the country aims to make a decision during 2012 and probably by mid-year, Buskhe said. South America’s biggest economy is choosing among the Gripen, Dassault Aviation SA (AM)’s Rafale fighter, and Boeing Co. (BA)’s F/A-18 Super Hornet.

Saab edged out the Rafale and the Eurofighter, partly built by BAE Systems Plc (BA/), to modernize the Swiss fighter-jet fleet in a victory for the Swedish manufacturer that had struggled to secure more export orders for its marquee plane. Switzerland, which seeks to replace its ageing Northrop F-5 Tigers with 22 new jets, has yet to make a final decision. The political process, which may include a national referendum, will probably slip into next year, Buskhe said.

“It’s not done until it’s done, but what’s positive is that their desire is very strong,” Buskhe said.

India Prospects

Countries beyond Sweden that operate the Gripen are South Africa, Thailand, Hungary and the Czech Republic.

The manufacturer, based in Linkoeping, hasn’t given up on selling Gripens to India, which tentatively opted to buy 126 Rafales.

“Some people there have reservations, and the decision- making process is far from complete,” Buskhe said, adding that Saab is “not campaigning hard.” “It could for example turn out that we sell parts of technologies,” he said.

Dassault is confident that an accord to supply the Rafale to India will cross all hurdles as the French company intensifies negotiations to clinch the first-ever export deal for the combat plane, Chief Executive Officer Charles Edelstenne said in an interview last week.

Saab is also pursuing campaigns in Denmark and the Netherlands, both of which may decide over the next couple years to replace their ageing F-16s, Buskhe said. Saab’s chances may be limited as both countries are “very tied” to Lockheed Martin Corp. (LMT)’s Joint Strike Fighter program, the executive said.

Buskhe reaffirmed Saab’s forecast that its 2012 sales will rise “slightly.” Defense spending is being reduced in the U.S. and Europe, while it’s gaining in Asia, making it steady on a global level, he said. Asian growth is mainly driven by Russia and China, where Saab is not present, he said.

“There’s been no big change in Europe for some months, but I feel that it’s starting to bottom out,” Buskhe said.

To contact the reporter on this story: Ola Kinnander in Stockholm at okinnander@bloomberg.net

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


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