Swiss voters have rejected the federal government's proposal to buy Gripen E multi-role combat aircraft from Saab, in a major setback to its plans to modernise the air force.
Approximately 53.4% of the voters reportedly opposed the purchase of jets, while 44% voted in favour of the transaction in the national referendum called up by the Swiss Greens and the Liberal Greens parties.
The Swiss Government had confirmed plans to acquire 22 single-seater Gripen E fighters at an estimated cost of CHF3.1bn ($3.4bn) for the replacement of the national air force's ageing F-5 Tiger aircraft fleet in August 2012.
However, Gripen opponents had argued that the aircraft would cost CHF10bn ($11.3bn) over their lifetime, which could be spent on education, transport or pensions, as reported by Bloomberg.
Swiss Federal Councillor Ueli Maurer claimed that the decision causes a security gap, and also assured that the government will do everything it can to fill the gap as quickly as possible.
"Different options on how best to ensure the armed force's operational readiness must be considered in the next few months," Maurer said.
Saab president and CEO Hakan Buskhe said the company respects the process and will not comment on the outcome in the referendum.
"We have seen in Switzerland support for Gripen, including through its evaluation and selection over competitors and in the votations in the Swiss Parliament last year," Buskhe said.
"Following selection in 2011, hundreds of business relationships in Switzerland have been created through the Swiss Industrial Participation programme, which was created in relation to the Gripen E procurement," Buskhe said.
Saab, which had signed a framework agreement with the Swedish Defence Materiel Administration (FMV) for production of 60 Gripen E jets for Sweden and 22 for Switzerland in 2013, however, assured that the Gripen E programme will continue as planned.
Expecting to deliver 60 fighters to the Swedish Air Force by 2018, the company is also currently negotiating the sale of 36 Gripen NG fighters to Brazil, with an aim to sign the final agreement this year.
Image: Swiss Government had planned to acquire Saab Gripen E fighter to replace the air force's ageing F-5E Tiger aircraft. Photo: courtesy of Peter Gronemann.