SAAB wins Brazilian fighter jet contract worth $4.5bn

Amid fierce competition from US’ Boeing and France’s Dassault Aviation, Sweden’s SAAB wins the Brazilian fighter jet contract to supply 36 aircraft worth $4.5 billion.

Analysts had expected either Boeing or Dassault Aviation to win the deal, one of the largest in emerging markets. During a state visit to Brazil last week, French President François Hollande had lobbied on behalf of the French company.

The SAAB Gripen NG is a lightweight single-engine multirole fighter with a delta wing and canard configuration. It is powered by the Volvo-Flygmotor RM12 engine and has a top speed of Mach 2 (1,552 mph or 2,450 kph, twice the speed of sound).

SAAB wins amid NSA row

Gary Duffy, who works at the BBC2 Sao Paulo office said “Boeing’s cause was not helped by a recent row between the US and Brazil over spying allegations.”

The Brazilian government and its people were furious when it was revealed that the US National Security Agency (NSA) had allegedly intercepted e-mails and messages from Brazilian President Dilma Rousseff, members of her office, and Petrobras, the state oil company. The allegations were made by Glenn Greenwald, who is based in Rio de Janeiro and was handed secret documents by Edward Snowden, an ex-NSA employee.

Brazilian media say that President Rousseff had been slanting towards Boeing. Before she cancelled her official state visit to the USA during the NSA row, most Brazilian analysts had expected her to announce the deal in Washington.

The BBC quoted David Fleischer, who works at the University of Brasilia as a political scientist, as saying “Boeing was very close but then the NSA booted them out of the air.”

This has not been a good quarter for Boeing as far as new big deals are concerned. A multi-billion fighter jet contract with South Korea was won by Lockheed Martin a few weeks ago.

SAAB wins contract and sees major rise in share price

Within a few hours of announcing the new contract SAAB shares rose 30% to a 5-year high.

Saab CEO Håkan Buskhe, said:

“I am extremely proud of the confidence that the Brazilian government has placed in Gripen NG. Saab regards the announcement today as a strong commitment of the Brazilian Government and we are looking forward to provide the Brazilian Air Force with the world-leading and most affordable fighter.”

“Furthermore, this announcement is very significant for the collaboration between Brazil and Sweden.”

“We stand prepared to start the industrial collaboration as planned, with its positive effects for Brazilian industry.”