Brazil announced on on Wednesday it had chosen the Gripen NG built by Sweden's Saab in a multi-billion-dollar contract for 36 new fighter jets, rather than French firm Dassault's Rafale and US-based Boeing's F/A-18.
The French government yesterday played down its failure to convince Brazil to buy Rafale fighter jets, insisting it still hoping to sell them to India and the Gulf nations.
The move was another blow to the Rafale programme, which has failed to win a single foreign sale after nearly three decades of development that has cost tens of billions of euros.
Rafale is a state-of-the-art fighter but countries make the choice depending on their strategic requirements, French strategy expert Corentin Brustlein told RFI.
Negotiations with Brazil date back to 2009, when then presidents Nicolas Sarkozy and Lula da Silva made an agreement in principle on the sale and technology transfer.
But since then Dilma Roussef has replaced da Silva after 2010's election and, although she is a member of his Workers' Party, defence policy has changed slightly with changes at the top of the Brazilain air force.
Massive protests against the cost of the World Cup have led the government to take a closer look at expenses and the five-billion-euro bill for the Rafale proved too much for a country with no special enemies and a history of military dictatorships.
In choosing the Gripen NG, the government chose the smallest, cheapest plane on offer, which is also the easiest to build.
The decision is bad news for Dassault and the 500 companies who would have worked with it but it's also bad news for the French government's attempt to balance its budget, since the sale would have enables it to cancel orders for the French air force.