-- Typhoon build rates may be cut as warplane’s backlog shrinks
-- Defense giant boosts half-year profit 11%; guidance unchanged
LONDON --- U.K. output of the Eurofighter Typhoon warplane may be cut as manufacturer BAE Systems Plc struggles to pin down a follow-on order from Saudi Arabia, the biggest export customer for the Mach 2 jet.
Eurofighter production is the cornerstone of a military-aircraft business that employs 12,500 people at BAE, with final assembly at Warton in northwest England. The last four aircraft from an earlier Saudi contract were delivered in the first half, with the first two from an Omani deal for 12 planes already shipped, eating into the backlog.
“We obviously have to review our production demand very carefully,” Chief Executive Officer Charles Woodburn said on a conference call Wednesday. “We are confident that we will win further Typhoon orders, what we can’t be confident around is the timing.”
Build rates will be under “constant” appraisal, London-based BAE said in a statement, adding that even if a new order was placed today it would take at least 24 months to boost production. The company has already slowed output of the Typhoon to help eke out the backlog and could do so further, Woodburn said. The Royal Air Force also has some planes yet to be handed over.
BAE Chief Financial Officer Peter Lynas said that the Eurofighter workload has been buoyed by the Omani deal as well as subcontracting work on 28 Typhoons ordered by Kuwait via its Italian partner in the consortium, Leonardo SpA.
“We’re not staring at a cliff edge here,” he said. “We now do as much revenue through the support of Typhoons as we do on producing Typhoons, so in that sense the production is relatively speaking somewhat de-risked.” (end of excerpt)
Click here for the full story, on the Bloomberg News website.
(EDITOR’S NOTE: Under current plans, BAE’s Eurofighter final assembly line will run out of work by the end of 2019, after delivery of 20 aircraft this year (8 for UK, 4 for Saudi Arabia – already delivered -- and 8 for Oman), 12 in 2018 (8 for UK, 4 for Oman) and six in 2019, all of them for the UK.
Unless new orders are forthcoming, the only Eurofighters left to deliver are the 28 ordered from Italy by Kuwait, in 2019-2022.
Click here for our latest review of Eurofighter orders and deliveries.)