BAE Details Status of Saudi Contracts, Prospects

(Source: compiled by; posted Aug. 2, 2017)

PARIS --- Below are the portions of BAE Systems’ half-yearly financial report pertaining to the company’s business Saudi Arabia.

We have emphasized in bold typeface points of particular interest. A link to the full report is provided at bottom.

Saudi Arabia

On the Salam Typhoon programme, with four aircraft deliveries in the period, all 72 contracted aircraft have been delivered to the customer. Typhoon capability expansion is progressing to schedule.

The Typhoon support contracts are operating well, meeting all contractual metrics. A contract amendment for a maximum of 20,000 additional flying hours was agreed in April.

Agreement was reached with the Saudi Arabian government in 2016 for BAE Systems to continue to provide support services to the Royal Saudi Air Force and Royal Saudi Naval Forces under the Saudi British Defence Co-operation Programme for a further five years to 31 December 2021. Further work is under way between the UK and Saudi Arabian governments to finalise the details of the follow-on contracts.

Through the Saudi British Defence Co-operation Programme, the business continues to support the operational capabilities of the Royal Saudi Air Force and Royal Saudi Naval Forces.

The contract for Hawk aircraft signed in 2012 is progressing with 18 aircraft delivered and accepted at 30 June. Manufacturing for the second batch of 22 aircraft, awarded in 2015, continues on schedule. Under this programme, we will undertake the final assembly of these aircraft in Saudi Arabia, with the first major units planned to be delivered in the third quarter of the year.

The Royal Saudi Naval Forces’ Minehunter mid-life update programme progresses. Acceptance of the third and final ship is expected in the fourth quarter of 2017.

Under the planned reorganisation of our portfolio of interests in a number of industrial companies in Saudi Arabia, Riyadh Wings Aviation Academy LLC acquired a 4.1% shareholding in a Group subsidiary, Overhaul and Maintenance Company, during 2016 and is expected to acquire a further interest up to a maximum of 49%.

The reorganisation supports our strategy to expand the customer base of our In-Kingdom Industrial Participation programme, promoting training, development and employment opportunities in line with the Kingdom’s National Transformation Plan and Vision 2030.

The Saudi Arabian In-Kingdom Industrial Participation programme continues to progress. During the first half of 2017, there has been further capability and knowledge transfer across the Typhoon, Hawk and Tornado aircraft platforms, with additional transfer activities scheduled on all three platforms being progressively introduced through 2017.

Click here for the full statement (45 PDF pages) on the BAE website.


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