ZURICH, Sept 18 Switzerland's upper house voted in favour of buying 22 Gripen fighter jets from Swedish defence firm Saab on Wednesday, although the purchase may still face a popular vote.
Swiss lawmakers voted 27 to 17 to finance the $3.4 billion deal, which would replace the country's aging fleet of Northrop F-5 Tiger fighters with the Gripen jets, mirroring a lower house vote last week.
"We have a responsibility as a small, neutral state to take the necessary safety precautions for our airspace," Defence Minister Ueli Maurer told the upper house.
Shares in Saab traded 1.9 percent higher at 134.80 SEK, outperforming a flat OMXS30 index.
The deal could still be derailed by a popular referendum if at least 50,000 people or eight cantons call for one within a limited timeframe. Left-wing politicians have said they will attempt to bring the issue to a popular vote.
The Gripens are unpopular with some in Switzerland, which hasn't fought an international war for 200 years, because the deal will require cost cuts in other areas, such as education.
Saab has pledged to use local suppliers in Switzerland for major components of the new jet to sweeten the deal.
Last month the company said its suppliers had so far signed 456 contracts with 117 Swiss companies valued at 315 million Swiss francs.
Switzerland opted for the Gripen as a cheaper alternative to the Eurofighter Typhoon, developed by a consortium of BAE , Finmeccanica and EADS, and Dassault Aviation's Rafale jet. (Reporting by Alice Baghdjian and Martin de Sa'Pinto; Editing by Louise Heavens)