SAABF SAAB AB (PK)

By Robert Wall

LONDON--The Swiss government is on the runway ready to purchase a new combat jet after a previous plan to acquire Gripen fighter planes made by Saab AB (SAAB-B.SK) was derailed by a referendum almost two years ago.

Defense Minister Guy Parmelin on Wednesday briefed ministerial colleagues in the Swiss cabinet on the preparations to acquire a new plane. Under the current timeline, Switzerland expects to decide what plane to acquire in 2020 with delivery of the aircraft to commence in 2025.

Saab in 2011 won a competition for a new version of its Gripen military plane to replace Switzerland's fleet of F-5 Tiger combat jets. The losing contestants were France's Dassault Aviation SA (AM.FR) offering the Rafale jet flown by the French military and the Eurofighter Typhoon built by a consortium involving Airbus Group SE (AIR.FR) , BAE Systems PLC (BA.LN) and Finmeccanica SpA (FNC.MI). Boeing Co. (BA) dropped out of the running earlier.

The purchase of 22 new combat jets at a cost of more than $3 billion at the time was politically contentious, though. Voters rejected the financing plan in a popular referendum in May 2014, scuppering the purchase.

The Swiss government on Wednesday said the referendum, however, never invalidated the need to modernize the country's air force of 54 F-5 Tiger planes, which are more than 30 years old. Replacement of the 31 Boeing F/A-18s also in the Swiss air force's inventory also is becoming necessary, the government said.

The F/A-18s will reach the end of their useful life in 2025. Extending their utility for about five years would cost about $500 million, it said.

A group of experts is supposed to spend the coming months to map out a strategy to lead to the eventual purchase of a new military plane, which would be presented to parliament next year, the Swiss government said.

The expert group, which will operate under oversight of the chief of the Swiss military and defense procurement chief, is supposed to assess the viability of the existing combat jet fleet, replacement strategy as well as industrial considerations that should be part of the program. A group of outsiders will shadow their work.

The Swiss program is likely to be heavily contested again, even though Saab has secured a lucrative export of Gripen fighters to Brazil since losing in Switzerland. Dassault and Eurofighter also remain keen on securing additional exports for their planes to help bolster production after 2020.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

February 24, 2016 09:59 ET (14:59 GMT)

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