Embraer and Saab launch joint production line for Gripen fighter jets in Brazil

GAVIAO PEIXOTO, Brazil (Reuters) - Embraer SA and Saab on Tuesday launched a production line for Gripen fighter jets in Brazil, a move seen strengthening their partnership as the South American country mulls potential new orders for the aircraft.

Brazil holds a contract for 36 Gripen jets with Sweden's Saab, but has been considering further increasing that order as the local Air Force has long said more fighters would be necessary to meet its needs.

Under the current deal, 15 jets will be produced at Embraer's Gaviao Peixoto plant in the state of Sao Paulo under a technology transfer agreement, with the first one set to be delivered in 2025.

Defense Minister Jose Mucio earlier this week said he would pitch to Sweden the possibility of the European country buying Embraer's KC-390 military transportation aircraft as part of a possible deal for Brazil to purchase more Gripens.

Saab and Embraer, in addition to the Gripen partnership, have an agreement for the Swedish company to support the KC-390 in its home country and potentially other markets, with the Swedish government saying it is currently evaluating its options including the KC-390.

"I'm sure we will soon have at this plant a KC-390 in Sweden's colors," Embraer Defense CEO Bosco da Costa Junior said at the inauguration ceremony in Gaviao Peixoto, where the transportation aircraft is also assembled.

Saab, meanwhile, eyes exporting Gripens from the new assembly line in Brazil, the first for the fighter outside Sweden, which Chief Executive Micael Johansson dubbed a “significant milestone”.

“We want Brazil to be an exporter to Latin America and potentially other regions,” said Johansson, who had told Reuters in an interview in April that Colombia and Peru were seen as potential clients.

(Reporting by Gabriel Araujo; Editing by Mark Potter)