Stewart Penney/LONDON
The UK has turned to the USA to meet its short-term airlifter and missile needs while looking to Europe for longer-term solutions. Contracts covering three competitions will be worth around £5 billion ($7.6 billion).
Although a Matra BAe Dynamics (MBD) team will develop Meteor to meet the beyond visual range air-to-air missile (BVRAAM) requirement, rival bidder Raytheon will supply AIM-120 AMRAAM missiles to arm Eurofighter in the near term.
Boeing will supply four C-17 Globemasters as short term strategic airlifters (STSA), but the Airbus Military Company (AMC) will supply 25 A400Ms for the future transport aircraft need.
Meteor is viewed as higher risk than its rival, but UK defence secretary Geoff Hoon says "tightly defined" contractual breakpoints with demonstrable milestones linked to the ramjet propulsion system, guidance system, datalinks and electronic countermeasures will reduce the risk. If Meteor fails to achieve independently evaluated milestones and target dates, the contract will be terminated, with MBD repaying the government.
Hoon says the missile deals are worth around £1 billion. The AMRAAM/Meteor split is one-fifth/four fifths.
MBD expects contract talks to last until at least the year-end. The task is complicated by the need for a common agreement with Meteor partners France, Germany, Italy, Spain and Sweden. The contract will be managed through the Defence Procurement Agency. MBD sources acknowledge that delays in selecting a BVRAAM winner will slip the 2008 in-service date.
AMC also faces the challenge of involving a group of nations in a single contract. Earlier commitments from Belgium, France, Italy, Spain and Turkey for 131 aircraft were enough to launch the programme (Flight International, 18-24 April). Alberto Fernandez, chairman and chief executive of AMC partner CASA, says: "We will continue talks with the German air force and government, but their decision will not make the programme 'go or no-go'. The programme is feasible from an industrial viewpoint."
Hoon describes the £3.5 billion order as an "initial launch…sufficient to build a viable programme, whilst safeguarding our industrial interests". This refers to BAE Systems' wing work, which some sources fear Germany will attempt to take over, and a Rolls-Royce engine proposal. Sources believe a formal A400M launch could happen at July's Farnborough air show. Germany's position could emerge at this week's future large aircraft policy group meeting.
AMC will have to meet stringent criteria to secure a contract, including programme launch and contract placement within a "reasonable timeframe", confirmation of unit prices and an in-service date that meets UK needs. AMC says the A400M will enter service 71 months after contract signature.
Hoon says the C-17 deal will be worth around £500 million, including lease fees and support. The cost is less than the initial STSA competition bid last year as UK organic training and support has been replaced by a US Foreign Military Sale (Flight International, 9-15 May). Chief of defence procurement Sir Robert Walmsley says the seven-year lease will include two one-year options.
Source: Flight International
