Austrian boost to Eurofighter project

Austria gives the Eurofighter its first export order

Austria has chosen the Eurofighter Typhoon combat jet to upgrade its air force in a 1.79bn euro (£1.16bn) deal for Britain's BAE Systems, Franco-German Eads and Italy's Finmeccanica.

The order for 24 planes is a major step for the Eurofighter consortium, which has been struggling to find an initial export order to establish itself in the market.

"The unanimous decision is for the Eurofighter, the Typhoon," Chancellor Wolfgang Schuessel said after a Cabinet meeting.

Austria rejected rival bids from Sweden's Saab, which was offering the Gripen, and also the F-16 from the largest US defence manufacturer, Lockheed Martin.

"I think it's a political decision," said Nick Fothergill, global aerospace analyst at Banc of America.

"Austria wants to feel more part of the Europe defence structure.

"We all thought possibly the Saab and maybe the F-16 were more appropriate for the budget that Austria probably has. But instead Austria has gone down a path that is political 75% and price 25%."

Austrian deal

The Eurofighter consortium has promised twice the deal's value in offsets - or business for Austrian industry - over a 15 year period.

The planes, which will replace an aging fleet of Saab Draken fighters from 2005, is neutral Austria's largest defence order since World War II.

The Typhoon has been under development since the 1980s for the air forces of Britain, Germany, Italy and Spain.

They are expected to take delivery of the first production models at the Farnborough Air Show in the UK later this month.