Everyone wins in the RAF replacement lottery

The Ministry of Defence procurement team wins because the American

giant Lockeed Aeronautical Systems was forced to cut prices to the bone

to compete.

Lockheed emerges victorious because that company has a definite #1000m

order for 25 of its C-130J transport planes, allowing it to get into

production and opening up the prospect for huge export contracts.

British Aerospace and 60 British companies including GEC-Marconi

plants in Edinburgh and BAe's Prestwick operation do well through the

re-awakened interest of the Government in the European Future Light

Aircraft programme.

The RAF succeeds because it now knows that it is guaranteed a

replacement for 25 to 30 year-old planes that are beginning to fall

apart. British industry generally does well because it has an interest

in both camps.

Up to 3500 UK jobs are secured by the C-130J project. Thousands more

will follow on should some future government elect to place a firm order

for up to 50 FLA aircraft.

As far as the Government is concerned and the much-publicised rift

between Defence Secretary Malcolm Rifkind and Mr Michael Heseltine,

President of the Board of Trade, officials in both Government

departments had but one response yesterday: ''Row? What row?''

Mr Heseltine was reported to be delighted with the arrangement. Mr

Rifkind was clearly cock-a-hoop.

Fears that the RAF would never contemplate mixing its transport fleet

with FLAs and the C-130J were immediately dispelled yesterday when Mr

Rifkind made it known that the European project had the opportunity of

winning an order for up to 50 aircraft by replacing, not only the

remaining aged Hercules aircraft, but also VC-10s and Tridents,

currently used in similar roles.

The Defence Secretary and his procurement officials come out smelling

of roses in what was beginning to look like yet one more banana skin for

the Government.

But despite all the back-slapping resounding around Whitehall last

night, the LFA is still only on the drawing board, and there is no

knowing whether or not some future government will follow up Mr

Rifkind's promises should the plane get off the ground.

Lockheed, on the other hand, has genuine reasons to rejoice. The RAF

is now the launch customer for its new Hercules C-130J. Once the

aircraft gets into production, the company hopes that other countries

will follow.

The Hercules is the most successful aircraft of its type in the world,

with more than 2100 in operation in 65 countries. If the C-130J sells as

widely as predicted, the new programme could be worth around #20bn to

Lockheed and other American suppliers and more than #25bn to UK

companies.

Its best selling point is that it will be available in 1996 when the

MoD wants to start replacing half of its fleet of Hercules aircraft.