* Sarkozy anxious to wrap up sale of Rafale jets to Brazil
* Race for $6 billion arms deal ahead of October elections
* U.S., Sweden still in the frame to sell their models
Source: DTN News / Reuters By Matthias Blamont(NSI News Source Info) PARIS, France - May 18, 2010: France is mounting a last-ditch bid to prevent another fighter sale slipping from its grasp as upcoming Brazilian presidential elections threaten to spoil its hopes of winning a first foreign sale of its Rafale com
bat jet.
After setbacks in Morocco and Asia, French President Nicolas Sarkozy is leading a campaign for a $6.3 billion deal to sell 36 warplanes to Brazil, but some French arms industry executives are worried the talks could stall ahead of elections in October.
Sarkozy is expected to discuss the latest stage in an expanding global race for air power when he meets his Brazilian counterpart Luiz Inacio Lula da Silva on the sidelines of a European-South American summit in Madrid later on Tuesday.
The French leader trumpeted an imminent deal during a trip to Brazil in September but Latin America's biggest power has yet to narrow down a field of three bidders from France, the United States and Sweden amid reports of a split over procurement.
"Every week bringing us closer to the election is worrying us a little more", a source familiar with the French bid said.
With Lula prevented from standing for re-election, some experts believe the country's next president could order a pause in negotiations or restart the lengthy process from scratch.
Built by family-controlled French aerospace firm Dassault Aviation (AVMD.PA), the twin-engined Rafale is locked in competition with Boeing's (BA.N) dual-engined F-18 Super Hornet and Saab's (SAABb.ST) single-engined Gripen.
Brazil says it will pick one of the three by end-July as the basis for exclusive negotiations on the renewal of its fighter fleet which includes Dassault-built Mirages. However industry sources note such deadlines have been delayed in the past.
"Even if the Rafale gets picked and a negotiation starts in a few days, it won't end before the handover of power," a French industry source said.
Some Brazilian top brass are reported to favour the Gripen, while Lula and his defence minister openly back the French.
"There is tension between the Air Force and the civil government," said Richard Aboulafia, aerospace and defence analyst with the Teal Group in Washington.
"Lula has expressed a choice for technology transfer and industrial relations with France and Dassault but the Air Force seems to have other ideas of what it wants to fly," he said.
STRATEGIC PRIZE
To make its bid more attractive, France has promised what it describes as a bold technology transfer deal favouring Brazil's Embraer (ERJ.N) but is said to be taking a harder line on price.
"Contacts between the Brazilians and the French have progressed well on technology transfer and maintenance, but Dassault doesn't want to cut prices and the Rafale is the most expensive plane," a French defence industry source said.
Boeing and Saab both say their planes are more competitive than Dassault's but give no further details. Analysts say fully equipped fighter planes sell for some $100 million each.
"Boeing has provided the Brazilian government with a detailed Super Hornet offer that we are confident best meets the technical and offset requirements of the competition" a Boeing spokesman said. Dassault and Saab both declined to comment.
The contest is part of a struggle for strategic advantage in one of the world's fastest growing regions, where the United States, Russia and Europe are all seen as vying for influence.
The U.S. navy aircraft carrier Carl Vinson made a trip in January to Rio de Janeiro with F-18s on board and a defence pact was signed a few weeks ago between Brazil and the United States, echoing a pact signed between Brazil and France last year.
Defence analysts say the United States faces some political barriers but is determined to remain in the race.
"The Gripen or the Rafale would be much easier for public opinion and Brazil's neighbours," said Francois Heisbourg, chairman of the International Institute for Strategic Studies.
The winner is also likely to get better access to South American defence contracts and would gain a symbolic victory ahead of a much bigger contest for 126 combat planes in India, one of the most sought-after contracts in the global arms trade.
Sakozy ordered a rethink of the way France, the world's fourth largest exporter, handles big arms deals after its former colony Morocco stunned Paris by shutting the door on the Rafale and buying the F-16 built by Lockheed Martin (LMT.N) instead.
bat jet.
After setbacks in Morocco and Asia, French President Nicolas Sarkozy is leading a campaign for a $6.3 billion deal to sell 36 warplanes to Brazil, but some French arms industry executives are worried the talks could stall ahead of elections in October.
Sarkozy is expected to discuss the latest stage in an expanding global race for air power when he meets his Brazilian counterpart Luiz Inacio Lula da Silva on the sidelines of a European-South American summit in Madrid later on Tuesday.
The French leader trumpeted an imminent deal during a trip to Brazil in September but Latin America's biggest power has yet to narrow down a field of three bidders from France, the United States and Sweden amid reports of a split over procurement.
"Every week bringing us closer to the election is worrying us a little more", a source familiar with the French bid said.
With Lula prevented from standing for re-election, some experts believe the country's next president could order a pause in negotiations or restart the lengthy process from scratch.
Built by family-controlled French aerospace firm Dassault Aviation (AVMD.PA), the twin-engined Rafale is locked in competition with Boeing's (BA.N) dual-engined F-18 Super Hornet and Saab's (SAABb.ST) single-engined Gripen.
Brazil says it will pick one of the three by end-July as the basis for exclusive negotiations on the renewal of its fighter fleet which includes Dassault-built Mirages. However industry sources note such deadlines have been delayed in the past.
"Even if the Rafale gets picked and a negotiation starts in a few days, it won't end before the handover of power," a French industry source said.
Some Brazilian top brass are reported to favour the Gripen, while Lula and his defence minister openly back the French.
"There is tension between the Air Force and the civil government," said Richard Aboulafia, aerospace and defence analyst with the Teal Group in Washington.
"Lula has expressed a choice for technology transfer and industrial relations with France and Dassault but the Air Force seems to have other ideas of what it wants to fly," he said.
STRATEGIC PRIZE
To make its bid more attractive, France has promised what it describes as a bold technology transfer deal favouring Brazil's Embraer (ERJ.N) but is said to be taking a harder line on price.
"Contacts between the Brazilians and the French have progressed well on technology transfer and maintenance, but Dassault doesn't want to cut prices and the Rafale is the most expensive plane," a French defence industry source said.
Boeing and Saab both say their planes are more competitive than Dassault's but give no further details. Analysts say fully equipped fighter planes sell for some $100 million each.
"Boeing has provided the Brazilian government with a detailed Super Hornet offer that we are confident best meets the technical and offset requirements of the competition" a Boeing spokesman said. Dassault and Saab both declined to comment.
The contest is part of a struggle for strategic advantage in one of the world's fastest growing regions, where the United States, Russia and Europe are all seen as vying for influence.
The U.S. navy aircraft carrier Carl Vinson made a trip in January to Rio de Janeiro with F-18s on board and a defence pact was signed a few weeks ago between Brazil and the United States, echoing a pact signed between Brazil and France last year.
Defence analysts say the United States faces some political barriers but is determined to remain in the race.
"The Gripen or the Rafale would be much easier for public opinion and Brazil's neighbours," said Francois Heisbourg, chairman of the International Institute for Strategic Studies.
The winner is also likely to get better access to South American defence contracts and would gain a symbolic victory ahead of a much bigger contest for 126 combat planes in India, one of the most sought-after contracts in the global arms trade.
Sakozy ordered a rethink of the way France, the world's fourth largest exporter, handles big arms deals after its former colony Morocco stunned Paris by shutting the door on the Rafale and buying the F-16 built by Lockheed Martin (LMT.N) instead. (Additional reporting by Andrea Shalal-Esa and Eduardo Simoes; Editing by Tim Hepher and David Holmes)
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