NATO picks Swedish Saab early-warning planes over US rival

By Sabine Siebold

ANKARA, July 7 (Reuters) - NATO announced a roughly $4.5 billion plan on Tuesday to buy up to 10 Saab GlobalEye surveillance planes to replace ageing AWACS early warning aircraft, backing a Swedish system over a rival solution from U.S. planemaker Boeing.

Secretary-General Mark Rutte said the replacement of Cold War-era Airborne Warning and Control System (AWACS) planes, best known for their rotating radomes, with a new system based on smaller business jets would tackle threats like drone swarms.

"This will ensure we keep NATO's... surveillance and early warning capability strong and credible for decades to come," he said during an event at a NATO summit.

With U.S. President Donald Trump repeatedly pressing allies to spend more on defence and buy more U.S. equipment, Rutte took pains to underline the international pedigree of the system which is mounted on top of Bombardier Global 6500 business jets.

"Like its predecessor, GlobalEye is a transatlantic programme, delivered by European and Canadian industries with essential contributions from US industries. It is a real success story, again, made in NATO," he told delegates.

Trump has repeatedly criticised European allies for relying on the U.S. for their security, while pressing them to buy more U.S. weapons. He has also threatened at times to quit NATO.

GlobalEye competes with Boeing's E-7 Wedgetail, an early warning and command-and-control aircraft based on the 737 jetliner and designed to oversee and direct battle. 

NATO said GlobalEye was a mission-proven system but did not elaborate.

Saab's shares rose near 4% on Tuesday, outperforming the European aerospace and defence index that edged lower.

POTENTIAL DELIVERIES FROM 2030

Reuters reported on Thursday that NATO would replace its Boeing E-3 Sentry AWACS jets with Saab's Swedish GlobalEye.

Technically, NATO is now entering into formal negotiations with Saab after making its provisional selection public.

Saab CEO Micael Johansson valued the purchase at up to $4.5 billion and told reporters that the Swedish group would be able to start deliveries in 2030 if a deal were signed soon.

He added that the final price had not been agreed but that it would be between roughly $400 million and $450 million per aircraft.

The final number of aircraft had been unclear as planners debated whether to order a more expensive version capable of mid-air refuelling. 

A person familiar with the matter said the GlobalEyes would not initially have this capability but that it was expected to be added in a later update.

The current AWACS fleet can be refuelled in flight, a capability that has proved valuable for missions near Ukraine.

(Reporting by Sabine Siebold, Additional reporting by Tim Hepher, Louise Rasmussen, Editing by Alexandra Hudson)