Friday, 5 October 2012

Brazil expects a better jet fighter deal

Brazil is hoping to secure a better deal on its planned multibillion-dollar revamp of the air force combat inventory with the possible purchase of up to 36 new jet fighters.

Officials say a decision on the fighter jet deal is unlikely before next year.

More than two years after Brazil revived its FX-2 program to re-equip the Brazilian air force with next-generation jet fighters, outlook on the Latin American country's purchase plans remains unclear.

A partial acquisition of the 36 fighter jets was to have been completed in 2011 but talks toward a contract were halted during the presidential election in 2010. When President Dilma Rousseff took office in January, her administration cited budgetary constraints and industry sources hinted at differences of opinion within the air force over the choice of the jet.

French jet fighter Rafale was the hot favorite after former French President Nicolas Sarkozy canvassed for manufacturer Dassault Aviation during talks with former Brazilian President Luiz Inacio Lula da Silva. Just before handing power over to Rousseff, Lula postponed a decision on the purchase.

Rafale is in competition with Boeing's F/A-18 Super Hornet and Swedish manufacturer Saab's Gripen NG.

U.S. President Barack Obama visited Brazil last year and his talks with Rousseau revived support for Boeing. The visit also brought into sharper focus Brazil's insistence on extensive military technology transfers as part of the manufacture, assembly and delivery of any jet fighters to the country.

Of the three rival bidders, Boeing has been notably proactive in forging partnerships with Brazilian aviation and defense companies both to prepare for a possible jet fighter deal and to position itself in a growing defense market that includes aerospace, unmanned aerial systems, civil and military aviation and satellite communications.

Boeing has actively entered a market dominated by Brazilian manufacturer Embraer, which seeks to unseat U.S. and other aircraft manufacturers with its own competitively priced executive jets, light attack aircraft and a planned tactical transport plane to capture the C-130 Hercules market.

The rival bidders have spent huge sums on marketing pitches in Brazil. Promotion costs are said to be running into hundreds of thousands of dollars. The total jet fighter deal at current estimates is worth up to $6 billion.

Brazilian media speculated the postponement might be linked to Rousseff's wait-and-see stance on the U.S. presidential election in November. She has indicated Brazil is interested in wide-ranging technology transfer cooperation with the U.S. government and private sector manufacturers.

The F/A-18 Super Hornet is cheaper than Rafale but the French jet is said to be more versatile. Unlike the Super Hornet, however, Rafale has struggled to find buyers outside France.

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