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Military

AirTanker Commences c.£2 Billion Financing Competition For UK Royal Air Force Air Transport And Refuelling Programme

London, 06 June 2007

  • Financing round to raise c.£2 billion capital for Future Strategic Tanker Aircraft (FSTA) programme
  • FSTA is the world's largest Private Finance Initiative (PFI) programme
  • AirTanker will provide UK with a state-of-the-art, highly efficient transport and tanker fleet of 14 Airbus A330-200 aircraft
  • Fleet will be 50% British-made and programme will sustain circa 7,500 jobs

The UK Minister for Defence Equipment and Support, Lord Drayson today announced that the Government had approved a Private Finance Initiative (PFI) solution as the most cost-effective way of replacing the RAF’s fleet of VC10 and TriStar aircraft. The Ministry of Defence will now proceed towards financial and contractual close of the FSTA PFI deal with AirTanker Ltd. In turn, AirTanker has announced the launch of the Financing Competition to raise circa £2 billion capital investment for the UK’s Future Strategic Tanker Aircraft (FSTA) Private Finance Initiative programme.

Commenting on the announcement, the joint EADS CEO’s Thomas Enders and Louis Gallois said: “As the largest shareholder in AirTanker and supplier of the aircraft, EADS fully supports the efforts made by all the members of the AirTanker team working alongside the MOD to conclude the details of this groundbreaking PFI deal. EADS believes that for long term service based solutions like FSTA, or the already operational Skynet 5, PFI will offer substantial benefits to both the Customer and the service provider.”

The Financing Competition intends to raise circa £2 billion from international financial institutions. AirTanker is being advised by Deutsche Bank. The fundraising and the overall PFI format of the programme is designed to provide the most cost-effective means of procuring and operating the FSTA capability for the MoD and the UK taxpayers over a 27 year term. The funding raised by the Financing Competition will be used to fund the establishment of the business, to procure the Airbus A330-200 tanker transport aircraft fleet and to build the new facilities from which AirTanker will operate the FSTA service.

Robin Southwell, CEO of EADS UK, added: “Let nobody be in any doubt that we are convinced this business represents excellent value for money to the taxpayer and an enhanced capability for the RAF.”

AirTanker, of which EADS holds 40% alongside Cobham (13.33%), Rolls-Royce (20%), Thales UK (13.33%) and VT group (13.33%) was selected as Preferred Bidder to operate the service for the Royal Air Force in 2005. AirTanker will replace the existing fleet of VC-10 and TriStar aircraft with the latest Airbus A330-200 transport and tanker aircraft, and will provide the ongoing air transport and refuelling capability to the RAF through a 27-year PFI contract with the UK’s Ministry of Defence (MoD).

Military Transport Aircraft Division is responsible within the EADS Group for all the military derivative programmes based on Airbus platforms and it will be responsible for the transformation into tanker/transport of these 14 units for the RAF.

The fleet will be owned and supported by AirTanker. The RAF will have complete operational control, and will fly the military missions. AirTanker will be paid according to the extent of the RAF’s use of the service.

EADS is a global leader in aerospace, defence and related services and employs a workforce of more than 116,000. The Group includes the aircraft manufacturer Airbus, the world's largest helicopter supplier Eurocopter and EADS Astrium, the European leader in space programmes from Ariane to Galileo. EADS is the major partner in the Eurofighter consortium, develops the A400M military transport aircraft through its MTAD Division, and holds a stake in the joint venture MBDA, the international leader in missile systems.

Notes to Editors:

  1. The A330-200 aircraft is considerably more capable and reliable than its predecessors. In the tanker role, the A330-200 provides twice as much fuel to receiver aircraft as the VC10. And, without any reconfiguration, in air transportation mode the A330 can fly around 300 troops and 8 tonnes of their equipment some 4700 miles in a modern, comfortable, fully equipped passenger cabin.
  2. AirTanker will be based at a new, purpose-built facility at RAF Brize Norton and will provide an integrated all-inclusive service which supports all operational scenarios; this will include full maintenance, flight and fleet management, ground services and state-of-the-art training for RAF FSTA personnel. The first aircraft will enter service during 2011, and will be available for both air-to-air refuelling and air transport tasks. The balance of the fleet will become available to the RAF over the following five years.
  3. FSTA will directly sustain around 3000 jobs in the UK, and a further 4500 indirectly. The MoD’s decision to choose AirTanker for FSTA has also had implications further afield. Both Australia and the UAE have subsequently selected the A330 tanker; this export success creates additional industrial benefit for the UK. The aircraft is also one of two being considered by the US Defence Department in a competition to determine who will provide the next generation of America’s air-to-air refuelling needs.

For further information please contact:

Jeremy Greaves
EADS UK
Tel.: +44 207 845 8419

Bill Clare
AirTanker
Tel.: +44 (0)20 7592 3800
http://www.airtanker.co.uk/

David Simonson
Merlin
Tel.: +44 (0)20 7653 6620

Tom Randell
Merlin
Tel.: +44 (0)20 7653 6620



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