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Wednesday, February 25, 2009

UAE green light for aircraft deal worth billions is good news for U.S. firms

ABU DHABI Ñ The United Arab Emirates plans to procure billions of dollars worth of aircraft from the United States despite global economic woes.   

Officials said the UAE has agreed to purchase 16 air transports from Boeing and Lockheed Martin. They said Boeing would supply its C-17 while Lockheed Martin would deliver the C-130J.

"These are final deals," UAE Maj. Gen. Obaid Al Ketbi said on Feb. 24.

Al Ketbi, who represents both the UAE military as well as the IDEX-2009 defense exhibition, said the aircraft procurement totaled $2.9 billion, with Lockheed to supply 12 C-130Js and Boeing four C-17s, Middle East Newsline reported. He said the C-130Js would cost $1.6 billion, and the C-17 deal would reach $1.3 billion.

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"The purchase of C-17 and C-130J transport aircraft is to meet the requirements of the UAE armed forces with regard to strategic and tactical air transport and to actively participate in rescue and humanitarian missions worldwide," Al Ketbi said.

Al Ketbi said the UAE's Al Waha Capital would arrange financing for the air transport deals. He said that neither the global credit crisis nor the sharp drop in oil would block the latest UAE arms deals. So far, the UAE has announced deals at IDEX worth more than $4 billion.

"I do not expect the purchase volumes to be impacted by the global economic crisis," Al Ketbi said.

At the briefing, Lockheed Martin vice president Rick Groesch confirmed that his company was discussing the deal with Al Waha for the C-130Js. But Groesch, who appeared surprised by the UAE announcement, stressed that an agreement has not yet been signed.

"No, we have not signed the deal," Groesch said. "We are in final discussions about the aircraft."

This marked the first UAE procurement of the C-17 and C-130J. Qatar has ordered four C-130Js and plans to receive the first aircraft in 2011. Executives said Kuwait and Oman were also negotiating for the C-130J.

The UAE has also been negotiating with Lockheed for the sale of its Terminal High-Altitude Area Defense system, estimated at $7 billion. Executives said the missile defense deal could be signed in 2010, with deliveries to begin after 2012.



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