Business

Saab fighter jet guns for orders

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Media captionJorn Madslien finds out how Gripen fighter jets are made

The noise is earsplitting as the Gripen fighter jet takes off from a small airstrip on the outskirts of a small Swedish town, only to disappear amidst the clouds.

The jet is manufactured by Saab, a brand commonly associated with a struggling carmaker, though this is not the same one.

The fast-growing aerospace and defence group that shares the Saab name is not only quicker.

It is also much more successful and important - both for Sweden and for the company itself.

Investing for Sweden

Next to the runway, shared with the civilian Linkoping City Airport, long stretches of weatherboarded barracks surround a small, low-slung hangar where the fighter jet is made.

Inside, cool jazz from a radio competes with the sound of hammers beating against metal.

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Media captionPilot instructor Rhys Williams: 'It's fun to fly this jet'

At first sight, the place looks more like an artisan workshop than a manufacturing operation producing one of the most sophisticated fighter jets in the world.

The Gripen project has emerged from Sweden's desire not to rely on foreign companies for its defence capabilities. The programme has been further strengthened by the country's supportive industrial policy.

Sweden has realised that targeted investment in hi-tech sectors, such as the military aircraft industry, can be hugely beneficial for the nation as a whole, according to Gunnar Eliasson of Sweden's Royal Institute of Technology and the Ratio Institute, a free-market think tank.

"Long-term competitive sustainability of an industry requires the local presence of one or more technology-leading firms for the rest of industry to learn from," he says in a book on advanced public procurement as industrial policy.

Investment in the Gripen project "has generated an additional social return to society on the order of magnitude of at least 2.6 times the original development investment", according to Mr Eliasson.

Competitive jet

Image caption Building the Gripen fighter jets is a manual and highly skilled process

Saab's gain is a commercial product that is marketable across the world, according to Lennart Sindahl, head of Saab Aeronautics, the largest of the group's five divisions.

The Saab JAS 39 Gripen has so far been bought not only by Sweden, but also by the Czech Republic, Hungary, South Africa and Thailand, and the UK is using it as its advanced fast jet platform for test pilots worldwide.

"It's quite fun to fly. The aircraft itself handles really well," says British instructor pilot Rhys Williams.

Saab is convinced it can extend its list of customer countries considerably over the next decade or so, as some 5,000 of the 13,000 fighter jets currently in operation are scheduled for retirement, and as emerging nations prepare to gear up their air forces.

"For the Gripen, there are new markets and market possibilities coming along all the time," Mr Sindahl tells BBC News in an interview.

Up for grabs

The biggest contract that everyone is fighting for at the moment is an anticipated $11bn (£6.7bn) Indian order for 126 fighter jets, set to become one of the biggest export orders in the history of the defence industry.

Image caption The Saab Gripen fighter jet is being sold to countries all over the world

Saab was recently told it had not been shortlisted for the Indian contract, due to be awarded in March 2012, but remains hopeful nevertheless.

"We are pushing ahead with the Indian campaign," says Mr Sindahl. "We are definitely not giving up."

A Brazilian contract for at least 36 fighter jets - and perhaps as many as 100 - is also up for grabs, and here Saab is optimistic.

"The Brazilians want to acquire knowledge about fighter design, and the best way to do that is not that we tell them but that we do it together," Mr Sindahl says.

"A very important part of our offer... is that we are in a situation where we can offer them to be part of the development of the Gripen for Brazil," he continues.

Brazilian aircraft manufacturer Embraer could become both a local manufacturer as well as a seller of the fighter jet to other South American countries, he says.

Critical period

Image caption Customer countries are invited to take part in the development of the Gripen fighter jet

Saab is convinced its lightweight single-engine multirole fighter aircraft is both as capable as and much cheaper to buy and operate than larger, twin-engined jets such as the Eurofighter Typhoon, Dassault's Rafale and Boeing's Super Hornet - not to mention Lockheed Martin's F-35 Joint Strike Fighter, which has suffered from cost overruns running into billions of dollars.

By contrast, Mr Sindahl observes: "We made the Gripen demonstrator at 40% of the original budget because we introduced new ways of working.

"In almost all the campaigns we have the advantage of low cost, with respect to purchasing and operating the aircraft."

The next few months will be critical as the potential Gripen customers make up their minds.

Saab knows that it probably will not win all the contracts.

But winning just some of them will bring in billions of dollars for the firm.

This year's Paris Air Show will take place at Le Bourget exhibition centre on the outskirts of Paris from 20 to 26 June 2011.

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