Swiss deal for 22 Saab fighter jets moves step forward

ZURICH/LONDON Wed Sep 11, 2013 1:40pm EDT

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ZURICH/LONDON (Reuters) - Saab's (SAABb.ST) proposed sale of 22 Gripen fighter jets to Switzerland won approval from the lower house of parliament on Wednesday with the Swedish defense firm confident the $3.4 billion deal would go through next year.

Lawmakers voted 113 to 68 to support the government's proposal to replace the country's aging fleet of Northrop F-5 Tiger fighters with the Gripen jets.

The deal, which will be debated by the upper house of parliament on September 18, could still be derailed by a popular referendum even if approved, if at least 50,000 people or eight cantons call for one within a limited timeframe.

"We cannot win a war against our native country with these jets, should one ever break out, but in the case of conflict or tension we could hold out for a minimum of four or five weeks," Defense Minister Ueli Maurer told parliament.

Switzerland opted for the Gripen as a cheaper alternative to the Eurofighter Typhoon, developed by a consortium of BAE (BAES.L), Finmeccanica (SIFI.MI) and EADS EAD.PA, and Dassault Aviation's (AVMD.PA) Rafale jet.

The move is unpopular with some in Switzerland, which hasn't fought an international war for 200 years, because it will require cost cuts in other areas, such as education.

Saab welcomed Wednesday's vote as "an important cornerstone in the process in Switzerland" with its shares jumping on the news and closing up 1.6 percent.

"We are very pleased with it but it is still a continuing political process that is going on in Switzerland," Tomas Samuelsson, head of Saab's Europe and Greater Middle East region, told Reuters at a defense exhibition in London.

"We are confident ... We are working on an assumption that it will go through."

He said Saab was continuing to work on fulfilling its pledge to use local suppliers in Switzerland for major components of the new jet which was given to sweeten the deal.

Last month the company said Saab's suppliers had so far signed 456 contracts with 117 Swiss companies valued at 315 million Swiss francs.

Speaking at the Saab stand at the Defense and Security Equipment International (DSEi) exhibition, Samuelsson said the structure of the deal with Switzerland would be a good template for future negotiations as Saab strived to meet its target of selling 300 Gripen jets in the next 10 years.

Saab has already sealed a deal to sell 60 jets to Sweden and is in negotiations with Brazil although Samuelsson declined to give details on how far these talks had advanced.

He said Saab saw all countries in Asia, South America and Europe which needed to start planning for replacement fighter jets as potential markets if the Gripen met their specifications.

"Brazil is one of those countries we are talking to," he said. "But we will never comment on where these countries are in the process or what they are thinking ... This is a decision that countries take for themselves."

(Reporting by Martin de Sa'Pinto and Caroline Cropley in Zurich, Belinda Goldsmith and Brenda Goh in London; Editing by Mark Potter and David Evans)

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