With the French Dassault threatening to walk away with Brazil's tender for 36 fighter aircraft with its Rafale multi-role fighter offering, American defence contractor Boeing Co is making an improved offer for its F/A-18 Super Hornets to swing the deal its way. Boeing has now offered to assemble most of the fighters in Brazil.

 Boeing has said it wants to manufacture just the first 12 planes in the US and transfer equipment and tools for assembly lines in Brazil, where Sao Jose dos Campos-based Empresa Brasileira Aeronautica SA (Embraer) could assemble the remainder.

Super Hornet breaking the sound barrier

According to Boeing officials in Brasilia, the offer to assemble most of the aircraft in Brazil has US government sanction.

Brazil is intent on developing an advanced defence industry of its own and a broad strategic defence alliance signed with France last year has given the European country's defence companies a competitive edge in an area which hitherto was recognised as an exclusive preserve of American companies.

The Brazilian contract is potentially worth much more than 36 fighters, for if this South American regional power should expand the contract to around 100 aircraft, as is surmised, then the value of the deal will shoot up to around $7.2 billion. (See: France, Brazil close to inking $7.2 billion deal for Rafale fighters)

Unlike Boeing, Dassault wishes to manufacture just six of these fighters at home and allow Brazil to construct the rest with full technology transfer. It has also said it will buy 10 Embraer designed and manufactured KC-390 military transport aircraft and has offered Brazil marketing rights for the South American region.

The problem with the Rafale, though top-of-the-line, is that it is also a pricy product and for that reason Brazil has said that the deal is dependent on Dassault offering a price that is competitive, comparable to that being offered to the French air force.

Boeing has also dismissed the marketing offer for Rafale in the South American region as a 'marketing ploy' for nations in the area are not likely to afford this pricy aircraft or are already committed to other products.

For the record, Boeing, Dassault and Sweden's Saab AB, are all being allowed to amend their bids delivered in June, and Brazil's air force is expected to make its recommendation this month.

For Dassault this is a particularly vulnerable moment as it has lost a number of overseas contracts to its American competitors in recent years, including one in Morocco that it thought it already had in the bag.

It will also be conscious that developments in Brazil will be keenly watched by India where the three finalists in Brazil are once again in contention for a massive 126-aircraft Indian Air Force order.