UAE Backs Out of Typhoon Discussions

The United Arab Emirates (UAE) has quit discussions with BAE Systems over the possible purchase of 60 Typhoon fighter jets, the company said.

BAE said in a statement Thursday that the Arabian Gulf state had informed the company it would not proceed with talks on a range of defense and security capabilities, including the Eurofighter Typhoon.

No reason for the scrapping of the talks has been given, but UAE sources said it was connected with easing of tensions in the Arabian Gulf region.

The British company has been leading talks for the Eurofighter consortium on a possible sale of the Typhoon to the UAE in competition with the Dassault Rafale and the Boeing F/A-18.

“BAE and the UK government have been in discussion with the UAE government regarding a range of defense and security capabilities including the potential supply of Typhoon aircraft. The UAE have advised that they have elected not to proceed with these proposals at this time,” the company said in a statement.

According to a UAE source close to the negotiations, the interim deal with Iran along with the direct diplomatic engagements the UAE has conducted have relaxed tensions between the gulf neighbors and contributed to the deal’s breakdown.

“At this point in time there is no need to acquire the weapons as our diplomatic efforts have succeeded,” the source said.

One industry source said the two sides had been unable to agree on price or close the gap on other aspects of the negotiations, including the industrial collaboration package.

“If they can find a solution to the problems, the door could still be open to Typhoon, but in the meantime I would expect France to re-energize its effort with the Rafale in the wake of losing in Brazil to the Gripen. It could also bring closer the day the UAE seeks to open a dialogue on the purchase of the F-35,” the source said.

In addition to the fighter talks, a defense agreement expected to be penned between the UK and the UAE has been put on hold regarding the UK assisting the UAE in marketing defense equipment to Europe, the source added.

The potential sale to UAE was a key export campaign in the Eurofighter consortium effort in the Middle East and elsewhere in an effort to keep production lines open beyond 2018.

Eurofighter partners include BAE, EADS and Finmeccanica.

The UAE originally preferred the Rafale but opened up the bidding to Typhoon and the F/A-18 after the two sides fell out over a range of issues.

In recent months, the Typhoon was reckoned to be ahead of its rivals in the bidding.

The Typhoon sales effort was part of a wider push by the British to boost defense relations with the UAE. The two sides have been negotiating a defense treaty, industrial collaboration and other investment opportunities.

The British Ministry of Defence declined to comment.

One of the potential industrial collaboration projects involving BAE and UAE industry involved development of a medium-altitude, long-endurance unmanned aerial vehicle.

British Prime Minister David Cameron and Defence Secretary Philip Hammond attended the Dubai Airshow last month for talks on the defense and industrial package.

BAE also said in the statement that it had failed to conclude negotiations with Saudi Arabia over pricing obligations on the sale of Typhoon jets. The talks have been in progress for around two years.

Saudi Arabia has purchased 72 Typhoons. Some 28 of those jets have already been delivered, with a further six scheduled to be handed over by the end of the year.

The British defense contractor said good progress has been made, but a definitive agreement has yet to be reached.

The company said Saudi Arabia remains a valued customer and agreements had concluded this month for the supply of guided missiles and Tornado maintenance and upgrade together worth £1.5 billion (US $2.4 billion).

The UAE has also been looking at acquiring more Lockheed Martin F-16 Block 60 fighters to boost its existing fleet. A possible new fighter deal involving 25 aircraft was revealed by US Defense Secretary Chuck Hagel during a visit in April to conclude a major arms deal involving standoff missiles. [via]