BAE share price: UK defence contractor signs deal with Brazilian Air Force

BAE Systems (LON:BA) has finalised an industrial cooperation deal with the Brazilian Air Force as part of a supply deal with Embraer, the UK’s flagship defence contractor has announced.

BAE’s share price has fallen one percent in early morning trading in London today.

Embraer is building the KC-390 transport and aerial refueling aircraft, for which BAE is supplying flight control electronics that provide full fly-by-wire control, and active side sticks, the latest evolution in inceptor technology. Active side sticks enable pilots to control aircraft through tactile cues used to direct and manoeuvre the plane.

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“This agreement is designed to create new opportunities for Brazil’s domestic aerospace industry,” Ehtisham Siddiqui, vice president and general manager of Commercial Aircraft Solutions at BAE Systems, said in a company statement.

“It will entail software development training and maintenance, repair, and overhaul services for the KC-390 flight control system that will be performed in Brazil.“

Meanwhile, it has emerged that BAE Systems will not rush into a contract with the UAE for the Eurofighter Typhoon. There has been speculation that BAE would achieve progress towards striking a deal to sell Eurofighter Typhoon combat aircraft to the United Arab Emirates (UAE) at the Dubai Airshow taking place November 17-21.

“What we want to do is get the right outcome for us, the UAE, and United Kingdom. But these things take time. We can’t rush,” Gulf News quoted a spokesperson for the British company as having said earlier this week.

British Prime Minister David Cameron paid a visit to the air show last Saturday in a move seen as part of the UK government’s backing for exports. “I continue to support Typhoon around the world, which is doing extremely well and is clearly in the running here as well, so there’s a lot of jobs, a lot of investment to be garnered from visits like this,” Cameron said during his visit.

The Eurofighter, built by a consortium comprising BAE, EADS and Italy’s Finmeccanica, is being marketed in the Gulf region by BAE, which is finalising and chasing deals in Saudi Arabia, Qatar and Bahrain. Eurofighter Typhoon and French firm Dassault’s Rafale jets are in a tight race to win the deal for at least 60 new combat aircraft to replace the UAE’s Mirage jets.

The BAE spokesperson reaffirmed earlier comments made by the British government and EADS that the UAE would not buy the Eurofighter in a straight contract. “There will be an industrial element to the deal but in terms of what we can’t really say anything,” the spokesperson added.

Signing a deal with the UAE would be a major success for BAE and its Typhoon partners EADS and Finmeccanica, after the consortium lost out to Dassault on a deal to sell 126 fighters to India last year.

As of 8:42 UTC buy BAE shares at 429.60p.
As of 8:42 UTC sell BAE shares at 429.30p.

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