Wednesday, November 30, 2011

Swiss opt for Saab's Gripen fighter jets

* Swiss to buy 22 JAS-39 Gripen

* Gripen the cheapest option among bidders

* Critics slammed Gripen for poor performance in tests

* Greens want deal put to referendum (Adds details, reaction)

ZURICH, (Reuters) - Switzerland has chosen to replace its fighter jet fleet with 22 of Swedish defence and aerospace group Saab's JAS-39 Gripen, Defence Minister Ueli Maurer said on Wednesday, dealing a blow to French rivals.

Neutral Switzerland has wrangled for the past three years over how to replace its ageing Northrop F-5E/F Tiger fighters, purchased in 1976 and 1981, with up to 33 new aircraft.

"With the Gripen the cabinet has opted for a fighter jet that fulfils military requirements, but at the same time can be tolerated financially over the medium and long-term by the defence ministry and the army," the government said in a statement.

Saab shares were up 9.3 percent to 118.70 Swedish crowns by 1548 GMT.

The hotly contested Swiss deal was seen as laying down a marker in the European aerospace sector.

Other bidders included the Rafale built by France's Dassault Aviation and EADS's Anglo-German-Italian Eurofighter Typhoon.

The 3.1 billion Swiss francs ($3.41 billion) price tag for the 22 Gripen was considerably less than rival bids, Maurer told a news conference in Berne.

The purchase of new jets is politically contentious in Switzerland and has been plagued by delays and a funding squeeze.

Last year the cabinet said it would push back the purchase of new fighters until 2015, giving ministers time to come up with a financing plan.

In September the Swiss lower house of parliament increased the defence budget to 5 billion francs from 2014 to finance a 100,000-strong army and the purchase of new fighter jets.

The Swiss decision faces opposition from some parliamentarians and within the military. Swiss media reported the Gripen fared worse in evaluation tests than the Rafale and the Eurofighter.

The Green Party, which has long opposed replacing the fighter jets, said on Wednesday it would fight the decision in parliament and call a referendum on the issue.

Dassault has yet to find a foreign buyer for its multi-role Rafale, billed as one of the most effective fighters in the world but also one of the most expensive.

Saab has already sold its jets to Sweden, the Czech Republic, Hungary and South Africa. ($1 = 0.9102 Swiss francs)

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