Chris Jasper/LONDON Ramon Lopez/WASHINGTON DC

BAE Systems says it is confident its $1.7 billion purchase of Lockheed Martin's Sanders electronic warfare business will get US regulatory approval, but while other transatlantic opportunities may be pursued, it rules out a formal tie-up with a major manufacturer in the near-term.

"We hope we will clear the hurdles on Sanders and if other opportunities come up we will follow them," says BAE chairman Sir Richard Evans says. "But the big bang approach is not as close as people think it is."

Though Evans accepts that BAE is seen "as aligned to Boeing", and says that "in programme terms that is true", chief executive John Weston says speculation about a major deal with the US giant is misplaced. Weston adds that programme-based initiatives are nevertheless being pursued.

In BAE's bid for the UK Future Strategic Tanker Aircraft competition, for example, Weston confirms that the conversion of ex-British Airways Boeing 767-300ERs is an option. "Taking the 767s and selling BA Airbuses might be a good deal for us," he says. BAE had previously proposed various Airbus platforms.

Referring to reports that BAE and Boeing may be exploring a link on military transport aircraft, Weston says the Airbus Military A400M - in which BAE is a partner - competes with the Lockheed Martin C-130J rather than the Boeing C-17, hinting that a deal of some kind might be possible.

BAE's takeover of Lockheed Martin Aerospace Electronics Systems (AES), which includes Sanders, Space Electronics & Communications and Fairchild Systems, is undergoing anti-trust review by the US Department of Justice. Meanwhile, the US Department of Defense (DoD) has appointed a panel headed by its acquisitions chief Jacques Gansler to ensure US security interests are addressed.

Bob Fitch, BAE Systems vice- president, government relations and marketing, says Mark Ronald, chief executive of the BAE's North American operation, has appeared before the panel, while the DoD has sent a team to the UK Ministry of Defence to discuss some issues. Fitch hopes "to know by late October or November where we stand". The $510 million purchase of Lockheed Martin Control Systems closes this month.

• BAE has reported its first results incorporating the former Marconi Electronic Systems business. The merger boosted sales to £5.66 billion ($8.03 billion) for the first six months of the year, with profit before interest up £164 million, or 48%, to £507 million.

On a pro forma basis, however, the figure rose just £3 million, with several sectors reporting reduced sales. BAE blames this on a bias in deliveries towards the second half, and says full year figures will be in line with expectations.


Only seven Hawk trainers were delivered in the six months, for example, out of an anticipated full-year total of 57.

Source: Flight International