April 30, 2010 3:00 am

Iraq in talks on £1bn Hawk jet deal

The Iraqi government is in talks to buy Hawk trainer jets from the UK in a deal that could be worth up to £1bn and would be a boost for BAE Systems, the defence contractor that manufactures the aircraft.

It would be Iraq's biggest arms purchase from Britain for more than two decades. It is understood that officials from the Iraqi Air Force will be visiting the UK in the coming months to test the Hawk, which is used to train fast-jet pilots.

Iraq is also considering aircraft from South Korea and Italy as it begins to rebuild its armed forces.

It is believed that the order would be for 24 jets, worth initially £500m but potentially worth up to £1bn once support and maintenance is included. Any agreement would be a government-to-government contract.

A deal for the UK would be a boost for BAE Systems' Hawk.

There are 900 Hawks in service around the world, being flown by among others the Royal Air Force, the US Navy and Nato Flying Training in Canada.

Other potential deals for BAE Systems include a competition in Poland as well as a lucrative contract for the US Air Force that would be for several hundred aircraft.

BAE is also in talks over a follow-on order to an existing contract with India, potentially worth £500m.

India ordered 66 Hawk jets from BAE in 2004 at a cost of about £1bn. Of these, 24 were built by BAE at its Brough plant in the north-east.

The remaining 42 are being manufactured under licence by Hindustan Aeronautics (HAL), the state-run defence company, and the first Hawks are now in service. A follow-up deal would probably see HAL place an order for the aircraft with BAE and they would likely also be built by HAL. An agreement could be signed in the next few weeks.

Alan Garwood, BAE group business development director, told the Financial Times earlier this month: "India is a market in which we see several substantial future business opportunities spanning the air, land, naval and security sectors. This includes the potential sale of a further batch of up to 60 additional Hawk training aircraft."

BAE Systems yesterday declined to comment on the potential Iraq order.

The main rivals to Hawk are Korea's T50, a supersonic aircraft, and Italy's M-346.

The Hawk was introduced in 1976 but the RAF is flying the T2 version, introduced last year and an almost new aircraft.

BAE's predecessor British Aerospace was in talks with the Iraqis in 1989 to sell 50 Hawks. This deal was blocked by the UK government amid concerns the aircraft could be converted for combat missions.

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