EADS-led company enters talks with European banks to secure funding for private finance initiative scheme
The UK Ministry of Defence's confirmation of the AirTanker consortium as preferred bidder to deliver its Future Strategic Tanker Aircraft (FSTA) service has cleared the way for the EADS-led company to seek the £2.5 billion ($4.8 billion) it requires to fund the private finance initiative (PFI) scheme.
AirTanker, which has already held discussions with lead adviser Deutsche Bank as well as Credit Lyonnais over financing the deal, will seek syndicated backers under a contest to run through this year, says chief executive Robin Southwell. The 27-year FSTA deal is likely to go to contract signature early next year, with AirTanker expecting to deliver services from late this decade under the approximately £13 billion programme.
The consortium is continuing discussions with airlines operating Rolls-Royce-powered Airbus A330-200s to source the secondhand element of the 15- to 20-strong FSTA fleet. "We will get the right aircraft at the right time," says Southwell, who adds that the majority of the FSTA fleet will be new-build aircraft. The system's "non-core" element – probably around a third of the total fleet – will be used to generate third-party revenue from the charter/lease sector, with these aircraft to be called on for Royal Air Force use only during major military contingencies. All the aircraft will be powered by Trent 772B engines, generating business worth £700 million to consortium member R-R.
AirTanker says more than half of the work related to the FSTA programme will be conducted in the UK, sustaining 7,500 direct and indirect jobs. Roughly 650 jobs will be created at RAF Brize Norton in southern England – the future main operating base for the A330 – with AirTanker Services to establish a new hangar, operations facility and training school at the site.
AirTanker's ownership structure is divided between EADS (40%), Cobham and R-R (20% each), and Thales and the VT Group (10% each). The companies already have experience in financing and managing PFI schemes, for example through EADS's involvement in the Paradigm Secure Communications team providing the UK's Skynet 5 satellite constellation.
Describing FSTA as a "central element" of the UK's future expeditionary warfare strategy, UK defence secretary Geoff Hoon says AirTanker's approval as preferred bidder "is an important milestone and a step closer to securing a PFI solution". A contract will be signed "as soon as possible", he says, but adds: "There is still much detail to be resolved." EADS chief executive Philippe Camus says the PFI model will deliver "value to the [UK] taxpayer without compromising on capability" and that EADS hopes to build on its FSTA success by also supplying the A330-200 tanker/transport to the French air force.
Flight International understands that future "wishlist" requirements for the UK's A330-200s include the addition of a large cargo door for military air transport requirements and the possible integration of standoff-range weapons such as MBDA's Storm Shadow cruise missile.
CRAIG HOYLE BROUGHTON
Source: Flight International