Friday, July 07, 2017

Austria to Retire Eurofighter Combat Jets: Austria will buy a new fleet of 18 supersonic combat planes that could save it more than $2 billion

The Wall Street Journal
By Robert Wall
July 7, 2017 6:27 a.m. ET

LONDON—The Austrian government Friday said it would buy a new fleet of 18 supersonic combat planes and retire its controversial Eurofighter Typhoon combat jets in a move it says could save more than $2 billion.

The move is the latest twist in a prolonged saga over the Eurofighter planes Airbus SE sold Austria over a decade ago. The deal has been mired in controversy amid fraud allegations. The Austrian government this year said Airbus Chief Executive Tom Enders was among those being investigated as part of the corruption probe. 

Airbus has denied wrongdoing and said it was cooperating with authorities. It is one of several corruption probes Europe’s largest aerospace company is battling.

Suspicions of corruption were raised as early as 2002, before the contract was completed, but remained unsubstantiated until 2006, when a parliamentary committee in Vienna identified suspect payments apparently related to the sale. At the time, it had little evidence of the rationale behind the payments and investigations continued.

Austrian defense minister Hans Peter Doskozil on Friday said in a statement that “we need to get the escalating costs of the Eurofighter under control and minimize the enormous cost risks associated with it—in the interests of the taxpayer and also in relation to the other branches of the armed forces.”

Austria had been evaluating its combat aircraft plans with the pending retirement of the more-than 40-year old Saab 105OE trainers also used for air surveillance.

It had considered buying a replacement plane and upgrading the Eurofighter Typhoons to add combat capability. Austria has early versions of the plane that don’t sport many of the capabilities other air forces such as the U.K. and Germany have in more modern versions of the plane.

But the government has determined buying a replacement plane for both the Saab and the Eurofighter would be €100 million ($114.2 million) to €2 billion cheaper depending on which new plane it buys. Those savings estimates are based on a total cost including operations to 2049 and reflect the higher upfront cost involved in buying a new plane. Austria said it would now move to a single-plane type and buy 18 new supersonic jets, 15 single-seat planes and three dual-seaters.

Airbus said the decision was one for the Austrian government. It added only that “the Eurofighter works very well for all other customers.”

The new plane would be introduced in Austria in the 2020 to 2023 timeframe, an Austrian Defense Ministry official said. The government said it would start talking to potential bidders. Potential bidders could include Boeing Co. and Lockheed Martin Corp. , as well as Sweden’s Saab AB and France’s Dassault Aviation . A purchase decision isn’t expected before next year.

The potential order adds to a growing list of competitions in Europe for new combat planes. Switzerland, Belgium and Finland are among other countries in the region considering buying new jet fighters.

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