Saab Eyes Canadian Fighter Aircraft Competition

By Robert Wall

FARNBOROUGH, England--Saab AB (SAAB-B.SK) Chief Executive Hakan Buskhe Tuesday said the maker of Sweden's Gripen combat jet would consider entering a potential competition in Canada to provide a new fighter if the process is deemed truly open.

Canada is mulling how to meet its needs for a future combat plane. The last time the country went through the process, Saab stayed on the sideline, assuming the competition was skewed to favoring the Lockheed Martin Corp. (LMT) F-35 Joint Strike Fighter. Canada is a partner on the massive, U.S.-led F-35 development program.

But a new government in Canada has indicated it is reassessing options, though details of what may unfold are not fully defined.

"We will go for it" if Saab believes it is a fair fight, Mr. Buskhe said.

Other combat jet makers, including Boeing Co. (BA), also are targeting an export of planes to Canada. Lockheed Martin similarly remains in the running.

Mr. Buskhe said he remains hopeful to secure further sales of the newest version of the Swedish combat plane, called the Gripen E, before the first of the planes is delivered in 2019. Sweden and Brazil are the lead customers for the single-engine warplane.

The Saab boss said sales of the older version of Gripen also remain a possibility.

One of the potentially biggest target markets is India. The country has long sought to buy a new fighter. Mr. Buskhe said the company was finalizing industrial plans to meet Indian requirements for domestic production.

Separately, Mr. Buskhe said the company was on track to achieve a target of 10% profitability. That would be attained "in the next years," he said, without giving a more precise timeframe.

The profitability target would be met without sacrificing research and development spending, he added. Saab's profitability last year and this year has been hurt by heavy investments in its involvement with Boeing to develop a candidate plane for the U.S. Air Force T-X advanced trainer competition.

The two partners have been coy about detailing their development progress, wary about showing their hand to rivals. Mr. Buskhe said the aircraft and its associating training system are going "according to plan." The Pentagon is expected to pick a winning supplier next year.

Write to Robert Wall at [e-mail]

(END) Dow Jones Newswires

July 12, 2016 10:18 ET (14:18 GMT)

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