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Sources: Oman to buy 24 Eurofighters

by Staff Writers
London, April 5, 2009
Oman is reported to be planning to buy up to 24 Eurofighter Typhoon strike jets worth an estimated $2.24 billion from Britain.

Officials at British Prime Minister Gordon Brown's office at No. 10 Downing Street did not give details of the deal. But defense industry sources have been saying that BAE Systems, Europe's largest defense contractor, would sell 24 aircraft to the Gulf sultanate.

The deal, once confirmed, will give the Typhoon project a major boost after years of uncertainty that Britain and its partners in Europe would buy enough of the aircraft to maintain production.

Oman would be the second Gulf state to acquire the Eurofighter. Saudi Arabia bought 72 in September 2007 in an $8.8 billion deal.

The first 24 of the twin-engine, multirole jets would be manufactured in the U.K. with the other 48 built in Saudi Arabia to boost Riyadh's drive to develop an indigenous defense industry.

The deal, including weapons systems, maintenance and associated programs, could ultimately be worth as much as $30 billion to prime contractor BAE Systems and firms spread across Europe as well as in Saudi Arabia, analysts said at the time.

Eurofighters are built by a consortium linking BAE, the Spanish and German units of the European Aeronautic Defense and Space Co., the France-based parent firm of the Airbus jetliner, Alenia Aeronautica of Spain and Finmeccanica of Italy.

The Typhoon is also in the running for a $11 billion contract from India for 126 multirole combat aircraft, New Delhi's biggest-ever defense deal.

The other contenders are Lockheed Martin's F-16, Boeing's F/A-18 Super Hornet, France's Dassault Rafale, Russia's MiG-35 and Sweden's Saab JSA-39 Gripen.

Oman wants the Typhoons to replace the aging Jaguar strike jets it bought from Britain in the 1980s.

The sultanate, a former British protectorate that lies on the southeastern tip of the Arabian Peninsula, has a long tradition of close ties with Britain's military.

Brown's office said the negotiations for the Typhoon sale to Oman had taken three years.

Critics say the Typhoon, which was designed to shoot down Soviet bombers, is an expensive relic of the Cold War. But its supporters maintain that it is fast and agile and suited to a wide range of missions

The reported sale will provide immense relief for the British government, and its European partners in the Eurofighter program, because of concerns that budget cutbacks could imperil projected purchases of the jet by Britain along with Spain, Germany and Italy.

The four countries agreed in 1998 to buy 620 of the aircraft between them. Britain's commitment to take 232 was the largest single order.

But the British Defense Ministry has been battling with a budget shortfall in its procurement program estimated at $57 billion over the next decade.

One of the most expensive commitments is the purchase of 88 Typhoons from the aircraft's third production run.

Budgetary pressures led all the partners to agree in 2009 to split the third tranche into parts, with the first batch bought immediately and the sale of the second group to be decided in 2011.

For Britain, that means an initial buy of 16 jets, worth some $2.7 billion, from the third production run.

That compromise was intended to keep assembly lines running until the financial problems could be sorted out. The reported sale of 24 jets to Oman should give the producing states a breathing space.

Britain faced penalties of up to $3.2 billion if it had to cancel the third tranche order, as well as the possible loss of up to 40,000 jobs related to the Typhoon production.



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MILPLEX
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