Farnborough Airshow

UK government closes deals with Boeing on P8 aircraft, Apache helicopters, jobs

CNBC with Reuters
The big themes out of Farnborough 2016

Boeing announced a new partnership with the U.K. government on Monday, involving a contract to buy nine new P8 maritime patrol aircraft, deliver 50 Apache AH-64E attack helicopters and boost spending and create jobs in Britain.

"Boeing and the government intend to work together to build a new £100 million ($129 million) P-8A operational support and training base at RAF Lossiemouth in Scotland, creating more than 100 new jobs," Cameron's office said in a statement ahead of his visit to the Farnborough air show.

In total, Boeing's new investment plan should create 2,000 new jobs in the U.K., as well as "additional bidding opportunities and competitiveness initiatives" for British suppliers.

Other key parts of the initiative include:

  • Boeing will make the U.K. its European base for training, maintenance, repair and overhaul for its defense fixed-wing and rotary platforms.
  • Boeing will make the U.K. a base for defense exports to Europe and the Middle East.

Boeing's announcement came just weeks after the U.K. voted to leave the European Union, in a move that raised concerns about companies pulling back investment from the U.K. The plan will be a welcome boost for the U.K. government as it grapples with political and economic uncertainty.

"We've doubled our presence in the U.K. over the past five years (and) we're going to continue to invest here. We don't really see our plans changing," Boeing CEO Dennis Muilenburg told CNBC at the U.K.'s Farnborough Airshow.

Boeing and the U.K. government said they would review the progress of their partnership each year at the Paris and Farborough air shows, beginning in 2017.

VCG/VCG | Getty Images

Apache helicopter deal

Boeing will deliver 50 Apache AH-64E attack helicopters to the British Army under an agreement signed between the U.S. and U.K. governments, the UK Ministry of Defence announced on Monday.

"This is not only a major boost to the British Army but it will also mean long-term, sustained jobs in the U.K as the vast majority of the training, maintenance, repair and overhaul will be done here over the service life of the aircraft," David Pitchforth, vice president of Boeing Defence U.K. Limited, said in a media release.

"We are working closely with our extensive U.K. supply chain, including Leonardo Finmeccanica Helicopters (Leonardo), to support initial operating capability of the aircraft in 2022," he added.

More funding for UK aerospace

On Monday, Cameron's office also announced a further £365 million ($471 million) of funding for aerospace research and development, to be jointly provided by industry and the government.

"These are part of the work of the Aerospace Growth Partnership which will publish a new strategy at Farnborough setting out plans to maintain the UK aerospace sector's leading position. This includes a new supply chain competitiveness charter signed by 11 major companies across the aerospace sector," the statement from Cameron's office said.

Cameron was quoted as saying: "Whatever uncertainties our country faces, I want the message to go out loud and clear: the U.K. will continue to lead the world in both civil and defense aerospace."

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