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Wednesday, March 27, 2013

Saab Eyeing Lease of Gripen to Malaysia and a Follow-on Deal with Thailand

Saab AB (SAABB) says sales prospects for its Gripen fighter are improving as country’s such as Denmark and Canada reconsider buying the Lockheed Martin (LMT) Corp. F-35 Joint Strike Fighter and others set fighter purchase plans.

Sales of current model Gripens and the NG, the next generation model, may exceed 300 units in the next two decades, Eddy de La Motte, head of Gripen Exports said today. A lease of fighters to Malaysia, a new sale to Finland and a follow-on deal with Thailand are possible, he said in an interview.

European and U.S. combat jet makers such as Boeing Co. (BA), Lockheed Martin and European Aeronautic, Defence & Space Co. are battling in numerous overseas markets as domestic orders come to an end, risking the closure of production facilities. Saab secured Gripen’s future with an agreement from its home country, Sweden, and Switzerland to jointly develop the new version to be delivered from 2018.

“We can now offer a fixed price, fixed performance and fixed timetable,” de la Motte said. “The outlook is better than anything I’ve seen.”

Canada opened talks with Saab after the country in December decided to review options amid concerns over mounting costs for the F-35 it was set to buy. “We have got a formal request,” de la Motte said, while adding a decision has not been taken to mount a sales campaign.

“Canada has strong ties to the U.S. and we are really looking at trying to assess our chances,” he said.

The Stockholm-based company is more bullish about the outlook in Denmark, another F-35 program partner, where the government said last week it would pick a combat aircraft in 2015. “It is ideal timing,” de la Motte said.

Brazil is among the country’s also considering Gripen. The government recently asked Saab and rival bidders Boeing and Dassault Aviation SA (AM) to extend their offers beyond a March deadline as it considers its plans, de la Motte said.

A lease to Malaysia would be arranged through the Swedish government, rather than Saab directly and may involve as many as 20 planes, he said. The Czech Republic, a current lessor of Gripens, is also in talks with Sweden to extend its use of the jet.

Contract timing, particularly in Eastern Europe, is in flux because of budget pressures, de la Motte said. Prospects there include sales to Bulgaria, Croatia and Slovenia, he said.

Saab secured a 47.2 billion Swedish krona ($7.32 billion) development pact for the Gripen NG in February and expects to book an order to build 60 of them before year end, Chief Executive Officer Hakan Buskhe said at the time. Switzerland plans to buy 22 aircraft.

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