A decision is expected early next year to roll all logistic support and upgrade work for the UK's Panavia Tornado GR4 fleet into a single contract with the aim of reducing flying costs by 50%.

The UK Ministry of Defence is expected to award the over-arching "capability provision" contract to BAE Systems Customer Solutions & Support (CS&S), which has four contracts to support the Royal Air Force's main strike aircraft. Industry sources say the contract could be valued in the "low billions" of pounds over more than a decade.

The move follows an announcement by the UK Defence Logistics Organisation (DLO) of its decision to "fold forward" long-term Tornado GR4 maintenance and upgrade work from its site at St Athan, south Wales, to a facility at RAF Marham, Norfolk, run by military personnel. Hundreds of job losses are expected at St Athan when the move is complete by 2008 - a further blow to the DLO's Defence Aviation Repair Agency (DARA), which had previously carried out such work. This follows a similar initiative to move related work on the RAF's BAE Harrier GR7/9 fleet away from DARA to RAF Cottesmore.

The proposed logistics restructuring for the Tornado GR4 fleet is part of a larger, two-year effort to reduce the UK armed forces' maintenance costs by 20%.

Under a potential contract to be awarded by mid-2006, BAE Systems would provide all logistics and upgrades for GR4s except engine work, to be performed by Rolls-Royce under a separate contract. Industry sources say the contract is likely to be "heavily incentivised".

Source: Flight International