AGENCE FRANCE-PRESSE,
LONDON: Saudi Arabia's move to sign a multi-billion-dollar contract with Britain for Typhoon Eurofighter jets marks a significant boost for BAE Systems and the wider European aerospace sector.
Britain's government announced Wednesday that it would supply Saudi Arabia with jets in a massive deal reported to be worth up to 70 billion dollarsbillion euros), that primarily benefits defence giant BAE Systems.
The Eurofighter jets will be provided to the kingdom of Saudi Arabia, the world's top exporter of crude, which has benefited from record oil prices this year.
BAE Systems would emerge as “the biggest winner” from the deal, The Financial Times said Thursday, adding that BAE makes more than a third of each Eurofighter plane, including final assembly.
The Typhoon Eurofighter is produced by a consortium comprising the European Aeronautic Defence and Space Company (EADS) with 46 percent, BAE Systems with 33 percent and Italy's Alenia/Finmeccanica with 21 percent.
Until this week, the only export order for the Eurofighter planes had been from Austria, which has ordered 18 aircraft, with both Greece and Singapore rejecting it in favour of rival US jets.
The deal reportedly involved the purchase of 48 Eurofighter Typhoon jets, with an option to raise that to 72, although no official figures were given.
Thursday's Guardian newspaper said the deal could be worth eight billion pounds (11.7 billion euros, 13.9 billion dollars) to BAE Systems, while The Times estimated it could spell a 10-billion-pound deal for the firm and its sub-contractors.
On the back of Wednesday's news, European defence and aerospace companies made strong gains in stock market trading.
In London, BAE Systems soared 5.27 percent to 389.5 pence in afternoon Thursday trade, while the FTSE 100 index of leading shares rose 0.12 percent to 5,594.20 points.
In Paris, EADS gained 1.09 percent to 33.26 euros while the CAC 40 index won 0.18 percent to 4,760.94.
And Finmeccanica jumped 3.11 percent to 16.52 euros in Milan trade, where the SP/Mib index firmed 0.08 percent to 35,833 points.
Britain's Defence Secretary John Reid had confirmed the deal on Wednesday. He said in an official statement:
“BAE Systems, as prime contractor, and its many UK sub-contractors will benefit from the work envisaged under this understanding, which will help sustain several thousand UK jobs over the next 10 years.”
The Typhoon Eurofighter will replace the Tornado warplanes supplied to the Saudis in another massive and controversial deal two decades ago.
The Eurofighter is a multi-role combat jet with a range of 2,500 kilometres (1,560 miles) and can be equipped with a mix of missiles depending on its mission.
According to the FT, the Eurofighter jets costs around 65 million pounds each (95.4 million euros, 112.9 million dollars).
