BAE and Saudis agree order for 48 Typhoon fighter jets
Defence Secretary hails ‘historic relationship’, with agreement poised to secure thousands of jobs
BAE SYSTEMS has agreed a provisional sale of 48 Typhoon jets to Saudi Arabia – a deal that would secure thousands of jobs at the defence giant and its suppliers well into the next decade.
Company chiefs, Defence Secretary Gavin Williamson and officials from the Gulf state revealed a memorandum of intent as part of a £10bn-plus arrangement to supply the multi-role aircraft, at the end of a controversial trade mission by Saudi Arabia to the UK.
The agreement – the final terms of which will now be negotiated – is a long-awaited follow-on order for Typhoons after BAE sold 72 of the jets to the Saudi air force in 2007. The final price of that deal was only agreed in 2014 after years of wrangling.
BAE has slowed the production rate of the Mach 2 fighter because of a lack of orders, and cut hundreds of jobs from the line as anticipated demand failed to materialise.
Charles Woodburn, the BAE Systems chief executive, said: “Today’s news is a positive step towards agreeing a contract for our valued partner, the Kingdom of Saudi Arabia.
“We are committed to supporting the Kingdom as it modernises the Saudi armed forces and develops key industrial capabilities.”
Until a £5bn order from Qatar for 24 Typhoons in December, BAE had not secured a contract for the supersonic jets for two years.
Prior to the Qatar agreement, the production line at BAE’S base in Warton, Lancashire, had been expected to close in 2022.
Mr Woodburn had hinted the Saudi order – which has been delayed by concerns about cost, competition from rival manufacturers, development of newer aircraft with “stealth” technology and political obstacles – was getting close in the it annual results.
Mr Williamson said the deal signed by Crown Prince Mohammed bin Salman, and the visit, had “opened a new chapter in our two countries’ historic relationship”. He added: “We have taken a vital step towards finalising another order for Typhoon jets that will increase security in the Middle East and boost British industry and jobs in our unrivalled aerospace sector.”
With maintenance and support for the new aircraft, the contract could be worth several times the actual value of the jets. As well as securing jobs at BAE Systems bases, other major defence firms with UK operations are set to benefit from the agreement.
Rolls-royce is part of the consortium that builds the EJ200 engines that power the Typhoon, while Leonardo, the Italian defence group, builds the jet’s advanced radar at its Edinburgh base, along with avionics systems at its Luton plant. In total BAE Systems employs about 5,000 people on the Typhoon programme, with a further 9,600 jobs linked through the wider UK supply chain. BAE, Airbus and Leonardo each have a one-third share in the Typhoon programme.
However, Mr Woodburn’s comments about helping Saudi Arabia develop key industrial capabilities will inevitably fuel speculation that at least part of work on the Typhoons might be done in Saudi Arabia. Shares in BAE closed up 2.2pc at 601.8p yesterday.