Saab's upgrade of its Gripen fighter's engine gives the Swedish defense manufacturer an edge in the race to win Brazil's multibillion-dollar FX-2 fighter competition.

After early gains in negotiations by France's Rafale, made by Dassault Aviation, Boeing caught up in the contest with a quiet lobbying campaign that won support from U.S. President Barack Obama when he met with Brazilian President Dilma Rousseff in March.

Boeing is in the race with F/A-18 E/F Super Hornet, while Saab's JAS-39 Gripen NG is hoping to gain an edge over Rafale, which remains unsold outside France. Rafale is pinning hopes on deals in India and the United Arab Emirates to set precedent for other prospective buyers of the fighter jet.

Brazil's FX-2 competition has been in the news since former President Luiz Inacio Lula da Silva set out plans in 2008 for defense modernization that includes further spending on the navy and ground forces.

An FX-2 deal was reported imminent throughout 2010 but was postponed to 2012. Brazilians cited budgetary cuts and varying offers on technology transfers, which they see as a steppingstone toward developing their own defense aviation industry.

Gripen is seen by defense analysts as a serious rival for both Boeing and Dassault but has faced criticism that its aircraft relies too much on U.S.-made parts. Saab's announcement that it was upgrading the engine signaled the manufacturer's determination to outshine its rivals in the FX-2 bid.

Brazil plans to buy up to 36 next-generation fighters but hasn't firmed up final order quantities or the period for payments and deliveries.

In September, Volvo Aero AB announced plans to increase the thrust produced by RM12 engines used on Gripen fighters. A number of technical solutions to achieve that capability were presented at a major international aero engine conference in Gothenburg, Sweden.

Volvo said it would increase thrust 2-15 percent, depending on customer requirements, through development of a new or modified fan providing an increased mass flow through the engine and a new turbine with materials able to withstand higher temperatures and an increased cooling flow.

Volvo Aero said its engineers will achieve this by adapting and modifying a more recent version of the turbine from General Electric.

"We have stated previously that it is possible to significantly increase the thrust of the existing RM12 engine at a very competitive cost," said Henrik Runnemalm, head of research at Volvo Aero.

"We will then have a more powerful and economical engine. It also means that we can upgrade the 220 engines that the air force already has while maintaining engine competence within the country."

Both Gripen and Rafale took advantage of the NATO-led campaign over Libya to show off battle capabilities.

The Swedish government insisted the Gripen fighters are limited to supporting the no-fly zone and won't perform ground attack sorties. Swedish media reports said the Gripen's involvement in Libya might encourage sales.