Swiss Reject Gripen Purchase in Blow to Saab but Czech air force renews its Gripen lease contract.

Swiss voters rejected a 3.1 billion-franc ($3.5 billion) order for Gripen fighter jets, a setback to Swedish defense company Saab AB. Meanwhile, after a long negotiation, representatives of the Czech Republic and Swedish defence ministries on Friday signed an addendum to the lease contract of 14 Gripen jet fighters, which extends Czech military's lease until 2027 with a two-year option.

According to swiss websites, the 22-plane contract, which Switzerland awarded 2 1/2 years ago, was opposed by 53.4 percent of voters, the government in Bern said on its website today. That’s in line with the latest survey ahead of the vote, which showed some 51 percent of people polled opposed the transaction.

“The people have spoken,” said Susanne Leutenegger Oberholzer, a Social Democrat member of parliament. “We surely don’t have the money for such unnecessary acquisitions.”

Gripen opponents had argued that the planes would cost 10 billion francs over their lifetime, money that could be deployed elsewhere. The fighter plane’s supporters said neutral Switzerland needs the Gripen to defend its airspace. That claim got undermined in February with the forced landing of an Ethiopian Airlines Enterprise plane in Geneva. The hijacked plane had to be escorted by French and Italian jets as the Swiss air force doesn’t operate to protect the country’s airspace outside of business hours.

The result is “negative for Saab, but not exactly unexpected given the opinion polls,” Mats Liss, an analyst at Swedbank AB in Stockholm, said in an e-mailed response to questions today. While a Brazil order is more important than the Swiss one, a rejection by Swiss voters means there will be “a period of uncertainty until the Brazil order is finalized,” he said.

The original lease contract expires in April 2015. The addendum was signed by Swedish Defence and Security Export Agency head Ulf Hammarstroem and Czech Deputy Defence Minister Bohuslav Dvorak.

Czech Defence Minister Martin Stropnicky said the extended lease contract was balanced and advantageous for the country. He believes that the cooperation with the Swedes would also continue in other areas.

Czech will pay 21.4 billion crowns (about 1.07 billion U.S.dollars) for the further 12-year lease of the fighter jets. The annual payments will be about one third lower than they are now.

Under the addendum, the Gripens will be modernised and the Czech Republic will receive more services. The aircraft will be equipped with night vision, their efficiency in attacking ground targets will be upgraded, and they will be able to communicate with allied planes within NATO. There will be also further training of both the ground and flying personnel and ammunition will be provided.