In 1948 the Swiss air headquarters issued a specification for an interceptor/ ground-support aircraft tailored to fit the country's operational requirements. Two factories were contracted to produce prototypes: the FFA at Altenrhein and EFW at Emmen, the latter's competitor being projected as the EFW N-20.

FFA (Flug- und Fahrzeugwerke) submitted a design for a straight-wing, single-seat jet and the prototype flew (as the FFA P-16-01) for the first time on 25 April 1955 with a 3629kg thrust Armstrong Siddeley Sapphire axial-flow turbojet. As the EFW N-20 project had been abandoned in 1953, the P-16 had the field to itself, but the requirements of the specification were demanding. A high transonic performance with STOL. ability for operation from high-altitude strips was needed, as well as good manoeuvrability, a rapid climb with combat load and the ability to use grass airfields. In fact, the P-16 could takeoff in just under 488m and land with a braking parachute in less than 305m. Its remarkable performance was attributable to a very strong thin wing of low aspect ratio, with leading- and trailing-edge flaps; wingtip fuel tanks were a permanent fixture, and to assist in operations from grass twin mainwheels and nosewheels were fitted. Between 28 February and 12 March 1956 this aircraft was evaluated by the Swiss air force, but reports indicate that in spite of a number of good features the overall flight performance was unsatisfactory. However, the programme was proceeding well when, on the 22nd test flight, the prototype was lost following engine failure caused by a fractured fuel line; the pilot ejected successfully just before the aircraft crashed into Lake Constance.

Work on the second prototype had begun, but the programme suffered some delay before the P-16-02 flew on 16 June 1956; it became supersonic in a dive for the first time on its 18th flight on 15 August 1956 following extensive trials which included weapon evaluations and spinning. A third aircraft, the P-16-03, flew on 4 April 1957 powered by the bigger Sapphire Sa.7 of 4990kg thrust, As a result of the improvement in performance the Swiss government placed an order in March 1958 for 100 aircraft, known as the P-16 Mk III, but only a week later the P-16-03 was lost, also in Lake Constance, the pilot again ejecting successfully. Apparently a failure in the hydraulic-powered flight-control system on landing approach at low altitude prevented the pilot switching to manual control in time to save the aircraft. The production order was suspended immediately and two months later was cancelled. The Swiss government considered that the hydraulic system was faulty and the complete redesign necessary would cause too great a delay in the programme, but FFA and experts from the RAE Farnborough found that the system met British design requirements, an exactly opposite view to the official Swiss investigation team, whose findings were responsible forthe cancellation of the order. The relatively simple modifications to the hydraulic system were made by FFA and two pre-series aircraft were built on the company's own initiative, the P-16-04 flying on 8 July 1959 and the P-16-05 in March 1960. The design was eventually proven to be sound, but the production order was not reinstated.