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AUSTRIA PICKS EUROFIGHTER

2 July 02. Austria awarded Eurofighter GmbH a key victory on
Tuesday, selecting the multinational manufacturer to supply 24 of its Typhoon combat aircraft for a 1.79bn euros ($1.76bn) contract.

“The unanimous decision is for the Eurofighter, the Typhoon,” Chancellor Wolfgang Schuessel told reporters after a cabinet meeting that determined one of the few fighter export deals currently available. Eurofighter is owned by Franco-German EADS (XETRA:EAD.DE – News; Paris:EAD.PA – News), BAE Systems Plc (London:BA.L – News) of Britain and Italy’s Finmeccanica SpA.

In selecting the large and powerful Typhoon, Austria rejected two smaller fighters: the Gripen offered by BAE and its Swedish affiliate, Saab (Stockholm:SAABb.ST – News); and the F-16 Fighting Falcon of U.S. manufacturer Lockheed Martin Corp (NYSE:LMT – News).
The decision is a major win for Eurofighter, which has been struggling for an initial export order to establish its market credibility and to put it ahead of its near rival, the Rafale from Dassault Aviation SA (Paris:AVMD.PA – News) of France.

Both Eurofighter and Dassault suffered a serious setback last week when
Australia, usually considered to be an expert and therefore influential arms buyer, said it wanted Lockheed Martin’s F-35, which is not yet in production. Countries buying military equipment pay close attention to each other’s decisions. Although Greece has said it planned to buy the Typhoon, no one has signed an export contract for either it or the Rafale.

Schuessel said the race was close between Eurofighter and Gripen but that in the end the Typhoon was just three percent more expensive, had the more advanced technology and provided substantial business for Austrian industry.

Eurofighter pledged twice the deal’s value in offsets, or business for Austrian industry, over a period of 15 years. That business will come in the form of research and production orders from the Eurofighter group’s broad aerospace activities.

One U.S. official close to the negotiations interpreted the selection as positive for Lockheed Martin’s bid to sell F-16s to Poland. Austria had evidently been disatisfied with the Gripen’s offset deals, supposedly a key Swedish selling point.

When Austria eventually signs a contract to confirm its Eurofighter selection, the order will be the neutral country’s largest since World War Two. The Typhoons are intended to replace Austria’s old Saab Draken fighters from 2005.

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