Saab Turns Towards Asia, Eastern Europe to Save Gripen Fighter

Saab  is in a campaign to sell its Gripen Fighter in Asia
and eastern Europe as Switzerland’s decision to delay a $1 billion
fighter purchase.

Orders from Bulgaria, Romania and Slovakia and a follow-on contract
from Thailand are “major near-term opportunities” for the Gripen, which
competes with models from Lockheed Martin Corp., Boeing Co., Dassault
Aviation SA and Eurofighter GmbH, Saab Aeronautics chief Lennart
Sindahl said in an interview.

Switzerland will wait until 2015 before awarding a contract to replace
ageing Northrop F-5 Tigers, its defense ministry said on Aug. 25,
halting a tender regarded as key to the Gripen’s future by analysts
including Teal Group’s Richard Aboulafia. Saab is still betting on
orders from Brazil and India to save the flagship fighter as the
production backlog shrinks, with Malaysia another prospect, Hakan
Buskhe, the company’s new chief executive officer, said in his first
interview in the role.

“We were a little bit sad that the Swiss postponed, but there was a
tricky situation with the financing and I wasn’t totally surprised,”
Sindahl said by telephone yesterday. “The good thing is that we haven’t
lost the contract.”

Saab rose as much as 2 percent and was up 1.8 percent at 95.20 kronor
as of 10:17 a.m. in Stockholm, where the company is based, paring the
stock’s decline this year to 19 percent.

Dwindling Wordload

The Swedish manufacturer, which is competing with Dassault and
Eurofighter in Switzerland, requires new orders as work on 26 Gripens
for South Africa and an initial six planes for Thailand runs out in
2012, with an upgraded version not due to enter service with Sweden’s
air force until at least 2017.

Saab also needs export orders to establish the Gripen as the model of
choice in former Soviet and non-aligned markets not dominated by Boeing
and Lockheed Martin, which is grabbing contracts with its F-35
Lightning II Joint Strike Fighter.

Saab’s ability to offer the Gripen with in-house radar technology is
being pitched as an advantage over rival planes and helped it win the
existing Thai order,
Sindahl said.

The Scandinavian company views Brazil’s requirement for 36 jets as a
live competition even after President Luiz Inacio Lula da Silva
indicated last year that he favored the Dassault Rafale, Sindahl said,
with no contract for the order yet signed.

Factory Offer

In order to boost its chances of winning the $1.8 billion deal Saab has
offered to establish joint manufacturing of the Gripen in Brazil, which
currently operates Dassault’s Mirage.

“Every day that nothing new comes from Brazil I think we have gained a
little bit,” Sindahl said. “The longer it takes, the more discussions
there are and the more they start realizing how good the offer is both
with respect to the product and also to the package for Brazilian
industry.”

South America’s biggest economy is unlikely to choose between the
Gripen, Rafale and Boeing Co. F/A-18 Super Hornet before a presidential
election in October, the executive said.

India may announce the preferred supplier for a 126-plane
requirement by the end of this year after scrapping an April 27
deadline to select a replacement for Russian-built MiG jets dating to
the 1970s, Sindahl said.

The $10 billion order is the world’s biggest fighter-jet purchase in 15
years and has attracted bids from Lockheed, Boeing, Dassault,
Eurofighter and Russia’s United Aircraft Corp.

Saab hasn’t given up on winning Dutch and Danish orders for the Gripen,
CEO Buskhe said at the company’s Stockholm offices yesterday. The
Netherlands has selected Lockheed’s F-35 as its preferred candidate and
like Denmark is one of eight partner countries with the U.S. in
developing the plane.