UK to sign delayed tanker aircraft deal this month

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

The UK Ministry of Defence should sign a long-awaited contract later this month on its Future Strategic Tanker Aircraft deal, with one of the project's industrial stakeholders saying all barriers to closing the deal have been removed.

"We are well advanced on FSTA, and don't see any problems to roll that into a contract in the very near future," says Alex Dorrian, chief executive of Thales UK.

The company holds a 10% stake in the EADS UK-led AirTanker consortium, confirmed last year as preferred bidder for the estimated £13 billion ($26.2 billion) programme.

AirTanker will deliver a fleet of 14 modified Airbus A330-200s (pictured below) to replace the Royal Air Force's Lockheed TriStars and Vickers VC10s under a 27-year private finance initiative deal.

A rival bid based on the supply of secondhand Boeing 767s was rejected in 2004, but delays in advancing the FSTA deal have had a knock-on effect on the VC10, which could now remain in service until between 2013 and 2015 up to four years later than originally planned.

 
 © AirTanker

Thales says all funding needed to launch the project has now been secured via financial institutions, but concedes that the global credit crunch has had an impact on the pace of this process.

Dorrian meanwhile notes that with spending to be spread across the 27-year contract period, the project is safe from the MoD's current PA08 spending review. "The MoD understands our position, and the air force absolutely needs the product," he says.

The MoD had spent a total of £47.5 million on the FSTA project's assessment phase by January 2008, according to armed forces minister Bob Ainsworth.