FARNBOROUGH, England — Around £500 million expected to be saved in a new deal between BAE Systems and the British Ministry of Defence to support Royal Air Force Typhoon fighters could be reinvested in upgrading the jet.
The support deal, announced at the Farnborough air show, is set to run for 10 years and is valued at £2.1 billion, said the MoD in a statement.
The agreement is expected to generate efficiency savings of around £500 million, a substantial part of which could find its way back into upgrading the jet.
Under new rules agreed to by the Treasury last year, cost efficiencies generated by the armed forces can be recycled and used help fund spending requirements across the MoD.
Defence procurement minister Philip Dunne said the support contract will sustain hundreds of jobs and represent a substantial change in the way support is provided
"It will not only provide more efficient support and availability for our Typhoon fleet, but it will also help ensure Typhoon continues to meet the RAF's future operational requirements, including from 2019 undertaking the air-to-ground roles currently performed by our Tornado jets," he said
Avionics supplier Leonardo-Finmeccancia also has a major role in what is known as what is known as the Typhoon Total Availability eNterprise (TyTAN) agreement. Leonardo supplies about 60 percent of the avionics for the Typhoon and the company is negotiating an avionics support package for the fighter with BAE expected to be worth more than £600 million.