BAE reveals £2.7bn weapons, support deals with Riyadh

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BAE Systems will deliver another six Eurofighter Typhoons to Saudi Arabia before the end of 2013, with the manufacturer confident of closing long-running price negotiations over the nation's 72-aircraft Project Salam deal within the same period.

The UK company revealed new details about its Typhoon business with Riyadh in a six-month trading update published on 1 August, including disclosing the recent receipt of two new awards worth a combined £2.1 billion ($3.2 billion).

 

BAE Systems

"The first-half [figures] included an order in June, valued at approximately £1.8 billion, for follow-on support through to 2017 on the Salam Typhoon programme," BAE says. A £300 million deal signed in March will cover "the construction of airfield facilities at King Fahd air base" in Taif, it adds.

Saudi Arabia ordered its Typhoons in 2007, with deliveries from a first tranche of 24 UK-assembled examples having been completed in 2011. Four more aircraft have been transferred since April, and BAE says that with talks about price escalation linked to configuration enhancements due to reach resolution before the close of 2013, "a further six are planned to be delivered by year-end. Discussions on the provision of maintenance and upgrade facilities in-Kingdom, and further capability enhancement of the Typhoon aircraft, remain on-going", it adds.

In a half-year business presentation, the company lists additional international Typhoon sales opportunities as existing via a potential second batch of aircraft for Saudi Arabia, along with in Malaysia, South Korea, the United Arab Emirates and "other Gulf states". BAE says it also continues to monitor the status of New Delhi's yet-to-be-contracted deal for 126 Dassault Rafales, "and stands ready to support the Indian government's procurement process" should the situation change.

Meanwhile, MBDA is continuing Storm Shadow cruise missile deliveries for the Royal Saudi Air Force's Panavia Tornado strike aircraft fleet, says BAE, which holds a 37.5% stake in the European guided weapons manufacturer.

"Under the Tornado Sustainment Programme, further Storm Shadow missiles were delivered in the first half of 2013, with final deliveries due by the end of the year," it says. A follow-on weapons contract with Riyadh worth £600 million was signed in March it adds, "with deliveries expected to commence in 2014". The company did not disclose which weapons are involved in the latest deal, or say which of the aircraft types they will equip.

BAE also expects to finalise a contract with Saudi Arabia in the second half of 2013 "regarding further capability enhancements" for the nation's Tornado inventory.