Saudi Arabia to buy Eurofighter aircraft from the U.K.

LONDON: Britain has signed a memorandum of understanding with Saudi Arabia for the sale of an unspecified number of Eurofighter Typhoon aircraft. The British embassy in Riyadh issued a statement saying, “Under the terms of the signed document, Typhoon aircraft will replace the Tornado Air Defence Variant aircraft and others currently in service by Royal Saudi Armed Forces.”

No other details were given as the embassy said specific details of the arrangement is governed by the “existing confidentiality agreement”.

Sources in Riyadh said the deal covers at least 48 Eurofighter jets with an option to increase the number to 72 later.

The agreement follows high-level talks between visiting British defence minister John Reid and Saudi Arabia’s King Abdullah Wednesday. Reid had talks with the Saudi Arabian defence minister Crown Prince Sultan bin Abdul-Aziz, earlier.

This will be the first order for the aircraft outside Europe. In Europe, Germany, Britain, Italy and Spain are buying 620 Eurofighter planes in three batches. Austria has placed an order 18 jets.

Munich-based Eurofighter GmbH is a consortium formed by British defence company BAE Systems, European aerospace group EADS Co. and Italy’s Finmeccanica SpA. The Saudi deal provides for BAE Systems to transfer technology and invest in Saudi companies, while providing local training to Saudi nationals. The London-based company had provided Tornado planes, parts and airbase management to Saudi Arabia under the Al Yamamah programme since 1985. It employs 4,600 workers in Saudi Arabia, more than half of them Saudi nationals.

Defence deals between Saudi Arabia and Britain date back to the 1960s and are mostly governed by the arms-for-oil principle.

Reid said in an e-mailed message from Riyadh that BAE Systems, as prime contractor, and its many UK sub-contractors will benefit from the work, which will help sustain several thousand U.K. jobs over the next 10 years.

Analysts estimated that the deal could secure 10,000 jobs, which rely directly or indirectly on BAE’s Eurofighter’s Lancashire plant. Another 4,000 Rolls-Royce jobs will also be secured because the jets use its EJ200 engine.

BAE issued a brief statement welcoming the deal and hoping the agreement will be signed in the next few months. It did not put a value to the contract, but analysts said it could be in the range of 6 billion pounds to 20 billion pounds over a 10-year period.

The Al-Yamamah programme had contributed 215 million in profit on sales of 1.3 billion pounds for the company last year.