DefenseNews:
Executives: U.K. Refueler Deal Near Completion
LONDON - It's taken more than four years of talks, but senior executives from two of the companies in the consortium negotiating to provide Britain's Royal Air Force with a fleet of Airbus flight refueling tankers say they expect to seal the deal by the end of the month.
Thales U.K. Chief Executive Alex Dorrian told reporters here during a company briefing that he could see nothing to stop the deal from going ahead in the first quarter of the year, "unless the world comes to an end in the next fortnight."
Dorrian's view was echoed by Hans Peter Ring, EADS' chief financial officer. Speaking at the company's annual results presentation in Paris earlier March 11, he said the closing of the contract was due in the "next days or weeks."
EADS, Airbus' parent company, is the leading shareholder in the AirTanker consortium poised to complete a Private Finance Initiative (PFI) deal to supply 14 Airbus A330 air refueling aircraft to the Royal Air Force. They will replace Britain's aging fleet of VC-10s and Tristars. Other AirTanker shareholders are Thales, Cobham, Rolls-Royce and the VT Group. The consortium was nominated in January 2004 to provide the fleet of A330s to the RAF for tanking and transport duties.
The negotiations have been dogged by a series of delays, in part caused by the complexity of what is the world's largest defense PFI deal. At one stage, the MoD threatened to pull out of the negotiations after it tangled with AirTanker over the terms of the deal. Even at the last minute, AirTanker hit a hitch when efforts to finance the deal became a victim of the credit crunch. Moves to raise the 2.5 billion pound ($5 billion) cost of building the aircraft on the credit markets had to be abandoned. The money will be loaned from the banks instead.
A spokesman for AirTanker said the consortium members were "really confident now, we are very well placed to meet the March 31 date." An MoD spokesman confirmed the two sides were undertaking final steps to complete the negotiations. Industry executives here reckon the MoD could even announce completion of the deal before Parliament breaks for its Easter recess later this month..........