Saab loses out in Brazil fighter plane bid

Brazil has announced it will order 36 Rafale combat planes from France, beating out Sweden's bid to sell Saab's Gripen to the South American nation. The announcement was made on Monday during French president Nicolas Sarkozy's state visit to Brasília.

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Sarkozy and Brazilian president Lula da Silva announced they have begun negotiations around Brazil's planned order of 36 Rafale fighter planes, manufactured by Dassault. In turn, France will purchase the new cargo plane KC390 from Brazilian manufacturer Embraer.

Brazilian foreign minister Celso Amorim said that the deal is a strategic partnership between the two countries, because in addition to aircraft assembly operations in Brazil, the country will be allowed to sell these planes in Latin America, news agency AFP reports.

Dassault has been in a long-term bidding war with two other aircraft manufacturers, Saab in Sweden and Boeing in the United States for the Brazilian order. The deal was valued at more than €5 billion, the equivalent of 43 billion Swedish kronor ($6.1 billion).

Amorim said that technology transfer was a determining factor in the decision to choose the Rafale over Saab's Gripen and Boeing's F/A-18. AFP also reported that throughout the tender process, Brazil emphasized that full technology-sharing took priority over cost.

The Gripen features a US-manufactured engine from GE, which meant that Sweden also needed approval from the US government to be able to ensure full disclosure of the technology. According to AFP, the US had also insisted they were willing to share technology with Brazil, but Brazil was wary due to previous US vetoes on the export of Brazilian aircraft built with some US components.

Last November, Norway chose 48 Joint strike fighters from the US over the Gripen.

Swedish Minister of Defense Sten Tolgfors declined to comment on the Brazilian announcement. In April, he attempted to promote the Gripen deal in Brazil.

Saab was also tight-lipped regarding the news. “We have not yet received any confirmation from the Brazilian authorities,” Ulrika Fager, head of press relations at Saab, told TT news agency.

Although the Brazilian order was large, the world's fighter plane manufacturers are anxiously awaiting news from the Indian government, which is expected to purchase 126 planes next spring.

Brazil is the first export deal involving Rafales, but the plane – along with Gripen and several American aircraft – is also in the running for the Indian order.

Denmark and Switzerland are also expected to decide on a supplier to modernise their military aircraft fleets. Saab has given the Danish government a bid for 48 Gripens.

Croatia, Romania and Bulgaria have also expressed interested in the Gripen.