BAE Close to Typhoon Deal with Saudis

BAE Systems, Europe's largest defence contractor, said last week that it expected to agree a multi-billion pound deal to provide support and weapons systems for the 72 Eurofighter Typhoon aircraft to be bought by Saudi Arabia this year.

Ian King, chief executive, said the company was "in active discussions on the next phase" of a contract, signed between the UK government and the Gulf kingdom in 2007. Saudi Arabia buys arms from Britain under government-to-government deals and BAE then acts as the prime contractor to the UK.

The most lucrative contract so far, the al-Yamamah deal, under which Britain supplied Tornado and Hawk aircraft in the 1980s, has been dogged by allegations of corruption and bribery. The 2007 contract - Project Salam - is worth an initial £4.3bn.

The first deliveries of the jets are due to begin this year and Mr King said he expected to be "on contract" in 2009 to provide support and spares packages. If agreed, a deal would provide a significant boost BAE's sales this year.

Analysts have estimated that other orders for armaments and weapons systems on the jets could be worth £5 billion, with a further £10 billion being spent on maintenance, training and support for the aircraft over their lifetime. Mr King said he saw "no evidence at this time" of a slowdown in potential orders from the Middle East on the back of the recent drop in the oil price.

Overall, he said the company expected another year "of good growth" in 2009. BAE reported a 31% surge in underlying pre-tax profits to £1.9 billion in 2008 on sales 18% higher at £18.5 billion. It ended the year with net cash of £39 million. Its forward order book rose 20% to £46.5 billion.

BAE said it had benefited from the weakness of the pound against the US dollar - which accounted for £5.9 billion of the increase in the order book - as well as awards of new contracts, including a 15-year partnering agreement with the Ministry of Defence to supply munitions.





Air Tattoo Will Mark NATO Anniversary

Organisers of this summer's Royal International Air Tattoo at RAF Fairford in Gloucestershire are planning to continue their strong links with NATO by staging celebrations marking the organisation's 60th anniversary.

Among the member states and partner nations already committed to demonstrating the Alliance's air power on July 18-19 are Germany, Italy, Spain, Sweden, the US and the UK. They, along with many others, will send aircraft representing the wide variety of tasks NATO performs. Since it was established in the early 1970s, the Air Tattoo has prided itself on being a meeting place for NATO countries, giving visiting aircrew and military chiefs the opportunity to come together and exchange ideas.

In recognition of the valuable role that the Air Tattoo performs in developing this spirit of co-operation, friendship and integration, member states and aspiring member states have been keen to participate in the airshow's thrilling tributes marking the Alliance's key anniversaries. Indeed, in 1999, all 19 NATO member countries were represented at RAF Fairford for the Alliance's 50th anniversary.

The NATO link is strengthened further by the fact that in 1999, the United States Air Force operated from the Cotswolds' base during Operation Allied Force - the NATO air campaign in Kosovo. Among aircraft from NATO countries already confirmed for July are B-52 and B-1 bombers from the US Air Force and heavylift transporters including the C-17, C-5 and C-130. Fast jet displays will include the Typhoon (RAF), JAS-C39 Gripen (Swedish Air Force) and the F-18 Hornet (Spanish Air Force).

Joining them will be 2 of the world's most exciting aerobatic display teams: the legendary Red Arrows and the Italian Frecce Tricolori.