£2.5 billion deal for BAE Systems

Posted on 21 Dec 2012 by The Manufacturer

British defence manufacturer BAE Systems has secured a deal in Oman worth £2.5bn for the delivery of Eurofighter Typhoon and Hawk Advanced Jet Trainer aircraft.

The deal was confirmed by Prime Minister David Cameron who detailed that Oman will purchase 12 Eurofighter planes and  eight Hawk 128 jets.

Mr Cameron said that such boosts to UK exports are vital to economic growth. “That’s why I’m doing all I can to promote British business in the fastest-growing markets, so they can thrive in the global race,” he stated.

Cameron also noted that the deal would help safeguard employment in the UK. BAE has ststed that the contract will driectly safeguard 6,000 British jobs for the compnay alone with more being supported in the supply chain. This is welcome news as BAE progresses with decision making on the closure of one of three UK ship yards.

Thanks to the collaborative nature of the Eurofighter build, the Oman deal will also feed demand at Rolls-Royce which supplies engines for the aircraft.

The contract announced today is part of a strategy which has targeted the sale of over 100 aircraft in the Gulf region over the next few years. This would amount to around £6bn worth of orders for UK firms.

Manufacturer of the aircraft being sold to Oman will begin in 2014 with delivery expected in 2017. The commitment to manufacture the 18 Eurofighters for Oman adds to an order book of around 700 of the aircraft which are made by a consortium of european defence manufacturers.

In a separate announcement the Prime Minister said the UK government will also invest in new defence equipment for its troops in Afghanistan.

Cameron valued the anticipated spend at £230 million and said the money will come from Treasury reserves rather than the defence ministry’s budget.