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Switzerland nears $6.5 bln fighter decision after years of delays

5 minute read

Two F/A-18 Hornet fighter jets of the Swiss Air Force take off at the Swiss Army base in Payerne, Switzerland, August 25, 2020. REUTERS/Denis Balibouse/File Photo

ZURICH, June 30 (Reuters) - Switzerland's government was meeting to pick a next-generation fighter plane on Wednesday after a decade-long political tug-of-war over a 6 billion Swiss franc ($6.5 billion) contest among bidders from Europe and the United States.

Contenders include the Rafale from France's Dassault (AVMD.PA), Boeing's (BA.N) F/A-18 Super Hornet, Lockheed Martin's (LMT.N) F35-A Lightning II and the four-nation Eurofighter built by Germany and Spain backed Airbus (AIR.PA), Italy's Leonardo (LDOF.MI) and Britain's BAE Systems (BAES.L).

Swiss television reported last week that the F-35 provided the best technical and financial features in a Swiss evaluation, but the final decision was still open. read more

A deal by Switzerland with a European manufacturer could be seen as an attempt by Bern to heal relations with the European Union after the collapse of talks earlier this year about a new agreement to regulate their ties, analysts said.

The result is being closely watched as the first of three face-offs ahead of procurement decisions in Finland and Canada.

Switzerland's latest bid to procure fighters is driven by a pressing need to replace ageing Northrop (NOC.N) F-5E/F Tiger II and its 30 Boeing (BA.N) F/A-18 Hornet combat jets, which go out of service in 2030.

Both are suffering from fatigue and serviceability problems that have led to groundings, according to Gareth Jennings, aviation editor at defence publication Jane's.

Switzerland may also pick a $2 billion air defence system in a further transatlantic tussle between Franco-Italian group Eurosam (TCFP.PA)(LDOF.MI) and U.S. Raytheon's (RTX.N) Patriot.

Neutral Switzerland last year narrowly approved the funding for new fighters in a national referendum.

Opinion polls had shown the plan would easily win approval in a country where armed neutrality is a tradition, but only 50.2% of voters approved the funding in September.

'NO ENEMIES'

The "Air2030" contest is Switzerland's latest foray into the arms market after voters seven years ago rejected the purchase of Gripen jets from Sweden's Saab (SAABb.ST).

That vote was about financing the order but evolved into a bitter referendum on the Gripen itself, according to Jane's.

This time, Switzerland organised a vote on the overall procurement before proceeding with a detailed selection.

But a new referendum campaign opposing the purchase will be launched immediately if the Swiss government decides for one of the two American jets, Priska Seiler Graf, a member of parliament for the left-leaning Social Democrats, said.

"The American jets are simply too expensive. It’s not just about buying them, but the upkeep and operating costs will be massive over time," she added.

"We should seek a European solution as Switzerland is in Europe and we don’t want to be dependent on the United States.”

Anti-arms campaigners say Switzerland, which last fought a foreign war more than 200 years ago and has no discernable enemies, does not need cutting-edge fighters .

But supporters have said Switzerland needs to be able to protect itself without relying on others.

The latest campaign attracted competitive bids from the United States and offers of deeper integration with Europe, but the value of any order would be felt in years of follow-on support, Francis Tusa, editor of Defence Analysis, said.

Writing by John Revill and Tim Hepher; Editing by Alexander Smith

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