UK Confirms EADS for Tanker Program

From http://www.defense-aerospace.com

Ministry of Defence Announces AirTanker Ltd as Preferred Bidder on FSTA Programme

Source: UK Ministry of Defence; issued Feb. 28, 2005

The Royal Air Force is a step closer to getting a modern air refuelling aircraft under a Private Finance Initiative programme worth £13bn.

The British based AirTanker consortium has today been selected as Preferred Bidder for the Future Strategic Tanker Aircraft (FSTA) programme, which will create hundreds of jobs in the UK and sustain thousands of others.

Geoff Hoon, Defence Secretary said:

"FSTA is the MoD's biggest Private Finance Initiative project. I applaud the positive spirit in which industry has engaged during these important negotiations over the past 12 months and I am sure that they will approach the final detailed negotiations with the same energy and commitment.

It is expected that several hundred jobs will be created to support this programme throughout the United Kingdom. Several thousand more are expected to undertake work in support of the service.

The Ministry of Defence and the AirTanker consortium are equally committed to making FSTA a success, bringing to bear the private sector disciplines to provide military capability."

BACKGROUND NOTES:

1. Proposals submitted by AirTanker Ltd last year were judged to offer the best prospect of providing a value for money PFI solution to meet the RAF's Air to Air Refuelling requirement. Since then AirTanker has been engaged in detailed discussions with the Ministry of Defence over the key terms of the contract.

2. FSTA was nominated as a potential PFI project in 1997, when it was judged that the project, scoped as a service, could offer better value for money than conventional asset based procurement.

3. Under a PFI contract, AirTanker would own and maintain the aircraft and provide training services, infrastructure and some personnel, whilst the RAF would undertake military operations. A PFI contract offers the potential for the contractor to make use of aircraft not required by the RAF in peacetime to generate revenue through commercial use.

4. AirTanker Ltd. comprises EADS, Rolls-Royce, Cobham, VT Group and Thales.

5. The AirTanker Ltd proposal is based on a service solution utilising Airbus A330-200 fitted with Rolls-Royce Trent engines. The aircraft would operate out of RAF Brize Norton in Oxfordshire.

6. AirTanker expects to employ, directly and indirectly, several thousand people in the UK particularly at RAF Brize Norton (construction of facilities and service delivery), Airbus UK at Broughton (wing manufacture), Cobham at Bournemouth & Wimborne (aircraft conversion and air refuelling equipment), Rolls Royce, Derby (engines) and Thales, Crawley (training simulator). Hundreds of UK suppliers are expected to benefit from the contract.

7. The programme has an estimated whole life value of around £13Bn and is expected to provide the RAF with Air Refuelling capability under a 27-year service contract. Contracts have not been placed at this stage.

8. FSTA is planned to replace the RAF's fleet of VC10 and Tristar Air Refuelling/ Air Transport aircraft. Air refuelling is a vital military capability that enables our armed forces to rapidly deploy offensive, defensive and combat support aircraft, as well as troops and equipment, over long distances, in as short a time-scale as possible.

9. The enduring importance of air refuelling has been demonstrated on operations over many years and its importance was reaffirmed as part of the Strategic Defence Review.

10. The FSTA Integrated Project Team is based at the Defence Procurement Agency at Abbey Wood, Bristol.