The contest to replace Portugal’s F-16 fighters gained a fourth industrial bidder this week. On 23 September Dassault Aviation, acting for its Rafale partners Thales and Safran, signed a memorandum of understanding with AED Cluster Portugal, the national aeronautics, space and defence industry association, to “explore potential areas of cooperation” with Portuguese industry in the context of the Air Force’s F-16 fleet renewal. The signing took place at the French Embassy in Lisbon in the presence of Ambassador Asvazadourian.

Dassault said the agreement follows the official submission of a Rafale bid to the Portuguese government and Air Force in July 2026. As ECO noted, Lockheed Martin, Sweden’s Saab and the Eurofighter consortium had already signed similar agreements with the cluster. AED has more than 180 members, including companies, universities and research institutes.

The decision moves into the budget law

The MoU came days after the chief of the armed forces general staff, General João Cartaxo Alves, told Lusa that replacing the F-16s will be part of the new Military Programming Law (Lei de Programação Militar, LPM). He said the law is in the final stage of drafting and will go to parliament this year. In May, Defence Minister Nuno Melo had said the fighter programme might be left out. The current LPM covers 2023–2034 and provides €5.57 billion for military equipment.

Inclusion in the LPM sets the money and the timetable; it does not choose the aircraft. Melo has said the formal replacement process has not yet started. Fighters were also left off Portugal’s list of purchases under the EU’s SAFE defence-loan scheme, so the programme will have to be funded nationally. Cartaxo Alves, who commanded the Air Force from 2022 until early this year, has long made no secret of his preference for the F-35. As chief of the general staff he now says his job is to balance the needs of all three branches, and that the technical process belongs to the Air Force chief.

Saab’s offer, and what changes

Saab has run the most industry-heavy campaign so far. This spring it signed MoUs with OGMA, the Embraer-controlled aircraft maintenance company at Alverca, and with the Coimbra software group Critical Software, and extended the framework to AED. Its pitch copies the Brazilian Gripen programme, where Embraer assembles and supports the aircraft locally. In April Daniel Boestad, head of Saab’s Gripen business, named four Portuguese companies already in the Gripen supply chain: Critical Software, which builds the Gripen pilot simulator, Thyssenkrupp’s Portuguese operations, and the Marinha Grande tooling groups Kristaltek and Vangest.

Until now the Gripen E could present itself as the European alternative to the F-35 with the largest Portuguese work share. The Rafale changes that. Dassault is offering a second European, non-US option, and its press release stresses that the Rafale partners are “already established in the country”; Thales, for one, owns the Portuguese company Thales Edisoft. The Eurofighter consortium makes a third European bid. That puts Saab’s industrial package in direct competition with French offers built on the same argument: sovereignty plus local work.

The US option has political backing too. In February the US ambassador in Lisbon, John Arrigo, publicly argued for the F-35 on interoperability grounds. The Portuguese Air Force needs to replace roughly 27 to 28 F-16s over the coming decade.

What to watch

The first milestone is the LPM itself: how much money it sets aside, over how many years, and whether it hints at fleet size. After that comes the formal procurement process that Melo says has not yet begun. For Saab, the question is whether the OGMA and Critical Software agreements turn into binding industrial commitments before the competitors’ offers do.

Why this matters for the corridor

A Gripen win would rank among the largest Nordic industrial commitments ever made in Portugal, with final assembly or a maintenance hub at Alverca, avionics and simulator work in Coimbra and Porto, and tooling from Marinha Grande. A fourth bidder, and a second European one, makes that outcome less certain but raises the price of winning: every contender now has to show concrete Portuguese work. For Nordic suppliers in Saab’s chain, and for Portuguese firms already selling to Linköping, the next few months of industrial negotiations will matter as much as the choice of aircraft.