Some of the specifics, in keeping with the Suns tradition, are complete rubbish but I’m thinking about the overall validity of the articles headline…The Sun is after all pretty close to Blair.

>>Wasn’t there talk of diverting some of the Tranche 2 Typhoons marked for UK to the Austrian order?<<

U.K. May Let Austria Take Its Typhoon Delivery
By ANDREW CHUTER, LONDON

Britain is considering diverting 18 Eurofighter Typhoons destined for the Royal Air Force to Austria in a bid to help reduce the cash needed now to fund its share of the 20 billion euro ($24.9 billion) Eurofighter program.

Austria became Eurofighter’s first export client in mid-2003, ordering 18 air-to-ground Tranche 2 aircraft to be delivered between 2007 and 2009 from EADS’ production line in Germany. Under the new plan, those aircraft would instead roll off the BAE SYSTEMS assembly line in the United Kingdom.

This is just one way U.K. officials are trying to help the cash-strapped MoD afford their 89 Tranche 2 planes.

The Iraq war broke the MoD’s 2003-2004 budget by around 1 billion pounds ($1.9 billion), and officials are now trying to claw that money back out of subsequent budgets. U.K. program cuts are among the cost-saving measures expected in the next few months to balance the books while allowing the armed forces to continue their transformation into a network-enabled expeditionary force.

Britain, Germany, Italy and Spain have agreed to purchase a total of 620 aircraft: 148 in Tranche 1, 236 in Tranche 2 and another 236 in Tranche 3.

Shifting Austria’s planned purchase from EADS to BAE is not expected to affect work share over the long run. For Britain, the plan would merely shift 18 planes from the beginning of Tranche 2 to later, when presumably it will be better able to afford the new aircraft.

The possible change in plans was sparked by partner nations Germany, Italy and Spain, which are exploring ways to help the British negotiate a mismatch in availability of Typhoon Tranche 2 funds and the timeframe in which the work is to be carried out.

One defense official here involved in the program said Feb. 27 that although other options were being considered — including stretching the delivery timetable for Tranche 2 — the scheme to divert some U.K. aircraft deliveries to Austria from 2007-2009 was the only one that appeared to meet requirements without incurring heavy cost increases.

Details on the plan are scarce, but the idea is to switch the Austrian order from EADS to the BAE SYSTEMS production line at Warton. The aircraft would take up production slots originally earmarked for the Royal Air Force as part of its Tranche 2 purchase.

Funding Eurofighter

Some sources familiar with the program said the British may even have considered cutting Tranche 2 numbers altogether, but a memorandum of understanding committing the nations to purchase a total 236 aircraft blocks that route.

Should the scheme get the go-ahead, 18 aircraft for the Royal Air Force would be added to the production program. The move would maintain Britain’s overall commitment but reduce cash requirements at the front end.

“There is no suggestion that the U.K. or any other nation would reduce its overall off-take to make aircraft available to Austria,” a spokesman for the U.K. Ministry of Defence said. Negotiations continue to make Tranche 2 more affordable to the partners, he said.

Ground-attack capabilities are critical to the Royal Air Force, which is pushing to have precision-guided weapon capabilities — originally scheduled to be included in later phases of the Tranche 2 development and production — brought forward.

More than 700 million euros have been spent by the partners in Tranche 2 developments. Officials at prime contractor Eurofighter say the new variant could be in production within 12 to 14 months of contract signature, which was planned for early 2004 but could slip into early 2005.

Production of Tranche 1 aircraft already has been delayed nine months to a year in an attempt to ensure there is no costly production gap between the first and second batches of aircraft. Original plans called for Tranche 1 deliveries to be completed at the end of 2005, followed immediately by a four-and-a-half-year delivery program for Tranche 2.

Slowed by technical problems, only 28 of the 148 aircraft ordered for Tranche 1 will have been delivered by the end of May, according to Eurofighter.

Talks Continue

Speaking at the release of the company’s 2003 preliminary financial results Feb. 26, Turner said the negotiations would only be completed when the Ministry of Defence was convinced it “could afford the program going forward.” The agreement “may not be concluded this year,” he warned.

Turner said establishing the way ahead for Typhoon was one of the top 10 objectives set for the company in 2004. “First we need to finalize a specification for the first batch of Tranche 2 aircraft. Second, we need to agree [on a] timetable, build rate and production contracts for Tranche 2. Finally, we need to determine the consequential impact on the Tranche 1 program.”

The BAE boss said that could mean Tranche 1 aircraft being repriced to allow for the production slowdown once Tranche 2 negotiations were agreed.

Source = Defensenews.com