Brazil Eyeing French Fighter Jets

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By REUTERS
Published: September 7, 2009

BRASILIA (Reuters) - Brazil will begin final negotiations with France's Dassault Aviation to buy 36 Rafale fighter jets but expects a "competitive" price to close the deal, top government officials said on Monday.
The announcement made during a visit by French President Nicolas Sarkozy is part of a broader strategic defence alliance both countries signed last year.
"This is not a simple commercial deal... We want to think together, create together, build together and, if possible, sell together," Brazil's President Luiz Inacio Lula da Silva said during a joint press conference.
Dassault had made a satisfactory offer to transfer technology and allow Brazil to assemble and export the Rafale, Foreign Minister Celso Amorim told reporters.
"There is a decision to begin negotiations with one supplier and not the others," Amorim said.
But he stressed that France would have to offer a competitive price, comparable to that paid by the French Air Force. Offers for financing would also influence the decision, he added.
Amorim could not say whether Dassault's competitors had been definitively eliminated from the bidding process.
"I don't know if the tender is over, I don't want to enter into legal aspects," said Amorim.
The other two finalists in the tender to supply multi-role fighter jets to Brazil's Air Force were the F/A-18E/F Super Hornet supplied by Boeing and the Gripen offered by Sweden's Saab AB .
In exchange for the Rafale deal, France would buy 10 KC-390 transport aircraft to be built by Brazil's Embraer .
Only six of the Rafale jets would be built entirely in France, after which assembly would be gradually transferred to Brazil.
"We're not afraid to share our technology because we know that in the 21st century, countries need to talk as equals," Sarkozy said.
Delivery would begin in 2013 and the total contract for the fully equipped Rafale planes was worth 4.5 to 5.0 billion euros, an aide close to Sarkozy said.
Brazil eventually expects to replace its entire fleet of ageing fighter jets, potentially bringing the order to more than 100 aircraft.
Yves Robins, a spokesman for Dassault Aviation, said there was every reason to think Brazil would buy the Rafale planes.
"We can imagine that it will be concluded definitively in 2010, if things go well," he said.
Shares in Dassault Aviation rose 0.24 percent, while Saab's shares fell 2.1 percent in Sweden. U.S. markets were closed for a holiday.
Any deal would mark a breakthrough for Sarkozy after years of fruitless efforts by his predecessor to sell the Rafale warplane.
The Rafale resulted from a decision by France to build its own warplane in the 1980s, when it pulled out of the Eurofighter project of Britain, Germany, Italy and Spain.
Critics say the Rafale's price tag makes it too expensive, but French executives stress it has low operating costs and is agile in combat.
France hopes that securing a win for the Rafale will boost its chances as the global market for fighter planes heats up.
Embraer's KC-390, expected to be put into service by the middle of the next decade, will carry some 20 tonnes of troops and equipment, which puts it in the same bracket as the Lockheed Martin C-130, while the A400M turbo-prop will carry over 30 tonnes.