SAABF SAAB AB (PK)

By Robert Wall

LONDON--The Austrian government Friday said it would buy a new fleet of 18 supersonic combat planes and retire its controversial Eurofighter Typhoon combat jets in a move it says could save more than $2 billion.

The move is the latest twist in a prolonged saga over the Eurofighter planes Airbus SE sold Austria over a decade ago. The deal has been mired in controversy amid fraud allegations. The Austrian government this year said Airbus Chief Executive Tom Enders was among those being investigated as part of the corruption probe.

Airbus has denied wrongdoing and said it was cooperating with authorities. It is one of several corruption probes Europe's largest aerospace company is battling.

Suspicions of corruption were raised as early as 2002, before the contract was completed, but remained unsubstantiated until 2006, when a parliamentary committee in Vienna identified suspect payments apparently related to the sale. At the time, it had little evidence of the rationale behind the payments and investigations continued.

Austrian Defense Minister Hans Peter Doskozil on Friday said in a statement that "we need to get the escalating costs of the Eurofighter under control and minimize the enormous cost risks associated with it--in the interests of the taxpayer and also in relation to the other branches of the armed forces."

Austria had been evaluating its combat aircraft plans with the pending retirement of the more-than 40-year old Saab 105OE trainers also used for air surveillance.

Write to Robert Wall at Robert.Wall@wsj.com

(END) Dow Jones Newswires

July 07, 2017 06:10 ET (10:10 GMT)

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