Defence

Spain’s EADS Casa admits that it is reviewing a $590 million transport aircraft deal with Venezuela after US authorities said they were ready to veto the use of US engines and avionics. Venezuela signed a delayed deal for 10 C-295 tactical transports and two CN-235 maritime patrol aircraft, plus options on a further six C-295s, last November, despite US opposition to the sale (Flight International, 13-19 December 2005).

US government officials had expressed concern over the deal, which would allow the South American country – which it views as a potential threat to neighbouring countries – to deploy troops rapidly in cross-border operations.

The US ambassador to Spain, Eduardo Aguirre, was this month reported in the Spanish media as having communicated to the Spanish government that Washington would not issue a licence allowing EADS Casa to export products containing US technology, effectively confirming its intention to oppose the transfer of dual-purpose technology used in the Pratt & Whitney Canada PW127G and General Electric CT7-9 engines, which respectively power the C-295 and CN-235. US manufacturers also supply the avionics equipment used in both aircraft.

Deliveries were to start in mid-2006, but options now facing EADS Casa are understood to be a choice between delaying this schedule by swapping US-supplied components for European equivalents or providing compensation by breaking the contract. “We are now starting the process of analysing... replacing this [US] equipment with other equivalents from a different origin,” says EADS Casa.

AIMEE TURNER / LONDON