Helo Support: Ground crew members check over a British Army Apache attack helicopter prior to takeoff at Camp Bastion in Afghanistan. AgustaWestland's contract to sustain the helicopters is set to be extended. (UK Defence Ministry)
LONDON — Helicopter maker AgustaWestland is on track for an £800 million (US $1.28 billion) boost as the UK Defence Ministry prepares to go ahead with a program to convert a fleet of Merlin AW101 aircraft for mari-time use.
Meanwhile, a deal to support British Army Apache attack helicopters will be extended by another five years, according to government and industry sources.
With a go-ahead announcement for the two programs possible before the end of the year, rumors that the British arm of the Finmeccanica-owned company is in line for the work follows a Nov. 8 Norwegian government decision to purchase up to 22 AW101s for search-and-rescue duties.
Final pricing negotiations between the Norwegians and AgustaWestland are underway for acquiring 16 AW101s, with an option for a further six helicopters in a deal that could be worth around €1 billion.
It’s a critical boost for the Yeovil-based helicopter maker after being battered for months by allegations its parent company in Italy had bribed Indian officials in winning a deal to build 12 AW101s for government VIP duties.
Just days before the Norwegian announcement, the Indians issued a final show-cause notice, giving AgustaWestland until Nov. 26 to explain why action shouldn’t be taken against the company.
One option being considered by the Indians is cancellation of the deal.
The Yeovil factory in southwestern England is building the machines for India, but the UK business is not implicated in the corruption allegations.
The industry and government sources, who asked not to be named, estimated the new British business could be worth more than £800 million. Just more than half of that amount is accounted for by an extension of the Apache integrated operational support deal signed in 2009 and led by AgustaWestland.
The MoD and AgustaWestland both declined to comment.
The original £439 million deal covered an initial period to March of next year, according to Boeing UK’s website. Boeing developed the Apache and supports the AgustaWestland effort.
The initial deal covers the full 66-strong complement of Apaches flown by the British Army, although the number of operational machines is expected to be reduced to around 50 before the mid-point of the support contract.
Completion of a support deal set to run until 2019 comes as the capability sustainment program to replace or rework the Army’s old AH-64D Block 1 aircraft to the US Army’s new AH-64E standard gathers some momentum.
The principal options include a purchase from the Boeing Apache production line through a foreign military sale or an acquisition from AgustaWestland, which assembled the heavily modified British variant in use.
The other wrinkle is whether the MoD buys new aircraft or fits the major items on the British Block 1 rotorcraft into the new airframes.
The program could start moving forward competitively early in 2014, but the way ahead is unlikely to be settled until after the next parliamentary election and a strategic defense and security review in 2015, the sources said.
More immediately, though, AgustaWestland is expected to work on a program to optimize AW101 Merlin Mk3s being transferred from Royal Air Force battlefield lift duties to a maritime role with the Royal Navy’s Fleet Air Arm.
Around 25 Merlins are likely to be updated to an Mk4 configuration, with a folding rotor head and a new cockpit along with a wider package of life-sustainment enhancements. The reworked Merlins will replace Sea King helicopters used by the Commando Helicopter Force to lift Royal Marines into action starting in 2016. The Royal Navy already uses the AW101 for anti-submarine duties.
Seven Merlin Mk3s are expected to be rapidly reconfigured with a new folding rotor head, but not the new cockpit and other upgrades, as an interim measure to ensure there is no capability gap between the Sea King withdrawal and the availability of the first Mk4s.
Lord John Astor, undersecretary of state at the MoD, told Parliament this month that as of the end of October, 31 Fleet Air Arm aircrew and 150 maintainers had converted to the Mk3. A further 32 aircrew and 33 maintenance personnel are in the pipeline.
The first Royal Navy Merlin squadron initially with the Mk3 configuration is scheduled to stand up as part of the Commando Helicopter Force in the autumn of next year, Astor said in response to a parliamentary question.