News24
Govt signs mega aircraft deal
15/12/2004
Pretoria - The government signed an aviation deal with European aircraft manufacturer Airbus in Pretoria on Wednesday, which could benefit the economy by between R6bn and R15bn.
"At this stage it's difficult to say exactly by how much the country will benefit but the ball park figure will be between R6bn and R15bn," said Public Enterprises Minister Alec Erwin.
The deal, which sees local aviation companies become global partners in the building and design of the new A400M military aircraft, will also allow South Africa to purchase between eight and 14 craft at a later stage.
Erwin said participating in the programme would boost and revitalise the local aerospace industry.
The A400M, which would ultimately replace the SA National Defence Force's ageing C130 transport fleet, is set to be in full production by 2009.
Defence Minister Mosiuoa Lekota said the acquisition of the aircraft would greatly benefit not only South Africa but Africa.
He said the country had a large role to play in peace support initiatives and disaster management, which was costing "huge amounts of money" because flights had to be chartered.
"This deal will go a long way to equip our forces in the region," he said.
The SANDF's current military transport and airlift capacity is carried by a small fleet of nine Hercules C130 aircraft which are due to be replaced by about 2010.
Partner for life
But the deal was described as not only being of military value but also economic.
Francisco Fernandez Saintz, managing director of Airbus Military, said the company had already confirmed orders for 180 aircraft to be built - a process in which South Africa would be completely involved.
Richard Thompson, senior vice president, commercial, said South Africa had become a global partner in a "benchmark programme" which would see new military aircraft designed and built through a non-military process that would incorporate cutting-edge technology.
Local companies Denel and Aerosud have been named as contributors because of their existing experience and capability in aircraft manufacture, but Thompson said that as the process moved forward more companies would be contracted.
"The C130s lasted for 50 years. There is no reason why the production life of the new planes won't be as long," he said, explaining that South Africa would be a partner for life.
The agreement states that as the programme matures between 2010 and 2014, South Africa would be allowed to take delivery of between eight and 14 aircraft. Eight aircraft would cost €837m (R6.4bn).
The A400, an all-new four-turboprop aircraft that's currently in development, is expected to make its maiden flight in early 2008, with deliveries to the air forces of partner countries starting in 2009.
The deal is the first commitment for the aircraft from a country outside the group of seven European launch nations.
To date, Airbus Military has booked 180 firm orders from partner countries: France, Germany, Spain, Belgium and Turkey.
Airbus, which is 80% owned by European Aeronautic Defence and Space Co and 20% by BAE Systems, has a 64% work share in the A400M.