Brazil Opts for the Gripen NG after NSA spying sours Boeing bid - Saab shares soar

Brasilia: Saab AB beat out Boeing Co. to supply 36 jet fighters for Brazil’s air force after President Dilma Rousseff called alleged US spying on her government an affront to the South American nation.
The deal is worth $4.5 billion through 2023, the defence ministry said in a statement on Wednesday. “Brazil picked Saab over the Chicago-based company because of the performance and cost of its aircraft as well as willingness to transfer technology,” defence minister Celso Amorim told reporters in Brasilia. The other finalist was Paris-based Dassault Aviation SA.

Rousseff in September called off her state visit to Washington following reports the US National Security Agency (NSA) intercepted her communications with staff. On Wednesday she said the armed forces had a key role in strengthening cyber-security to protect privacy and Brazil’s sovereignty.
“Boeing only didn’t win the deal because of the lack of trust created by the spying incident,” Welber Barral, who was Brazil’s trade secretary from 2007 to 2011, said by phone. “Had the decision been last year, Boeing would have won.”

Boeing is disappointed and will work with Brazil’s air force to determine why it lost, according to an e-mail statement from the company.“Brazil’s government will maintain close commercial ties with the US,” Amorim said.

Brazil expects to sign the aircraft contract within 12 months, Air Force Commander Juniti Saito told reporters. Saab’s Gripen NG fighter jet will replace the Mirage 2000 that Brazil’s air force is scheduled to retire on 20 December. “It will be based on a similar model already being used in other countries,” Saito said.Saab offered a financing package and collaboration between the Swedish and Brazilian governments as part of its bid, the company said in a statement e-mailed yesterday.

It has marketed the aircraft as a less costly and more reliable alternative than that of some of its competitors. Switzerland has committed to buying 22 of the jets, though the decision may face a national referendum next year. Current Gripen versions are in service with the Swedish air force as well as the South African, Thai, Hungarian and Czech Republic armed forces.

Brazil’s decision is a setback for Dassault’s Rafale aircraft, which has struggled to build a presence outside France, with only India so far saying it wants to buy the fighter jet.