💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Poland scraps $3 billion Airbus heli deal, launches Lockheed talks: report

Published 02/04/2016, 08:23 AM
Updated 02/04/2016, 08:31 AM
© Reuters. Airbus Helicopters CEO Guillaume Faury stands near a multi-role military helicopter EC 725 by Airbus Helicopters at an international military fair in Kielce
AIR
-
LDOF
-
LMT
-

WARSAW (Reuters) - Poland has decided to scrap the $3 billion deal for 50 Airbus (PA:AIR) utility helicopters and will buy only a few aircraft from the European company, the daily Rzeczpospolita reported on Thursday citing defense sources.

The move, coming months before a NATO summit in Warsaw where Poland is expected to seek more allied presence on its territory, could strain Warsaw's ties with France and delay a military program speeded up because of the Ukraine crisis.

Poland's previous centrist government, beaten by the euroskeptic Law and Justice (PiS) party in elections last October, agreed a provisional deal with Airbus for 50 EC-725 Caracal multi-purpose helicopters.

That meant turning down offers from Sikorsky (N:LMT) in the United States and AgustaWestland (MI:SIFI) in Italy.

The contract, negotiated by the economy ministry, has yet to be signed and PiS has repeatedly said it would rather see the deal awarded to a producer manufacturing locally. Both Sikorsky and AgustaWestland have facilities in Poland.

As well as boosting Poland's defense industry, buying Sikorsky helicopters could further strengthen Warsaw's ties with Washington, already its closest ally, and could help secure U.S. backing for Poland's demands of more NATO presence on the alliance's eastern flank.

Airbus has proposed a so-called "offset program" that would source work on its helicopters in Poland, but Foreign Minister Witold Waszczykowski has described that as "leftovers" and said those aircraft would mostly be built in France.

The French defense ministry has now agreed Poland will only buy "several" helicopters from Airbus, Rzeczpospolita reported, citing an unnamed source in the Polish defense ministry.

At the same time, Poland has begun negotiations with Lockheed Martin's Sikorsky, manufacturer of the locally-produced Black Hawk helicopters that could be purchased by the Polish army as soon as this year, the daily said.

© Reuters. Airbus Helicopters CEO Guillaume Faury stands near a multi-role military helicopter EC 725 by Airbus Helicopters at an international military fair in Kielce

Earlier this year, a Polish deputy defense minister said that the deal with Airbus was "very likely" to be scrapped.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.