UAE Still In Talks With BAE, Dassault On Planes, Signs Airbus Satellite Deal

The United Arab Emirates is still in talks with both BAE Systems and Dassault Aviation over the possible multi-billion-dollar purchase of fighter jets, a spokesman for a major UAE defence organisation said on Monday.

Speaking at the biennial IDEX defence conference in Abu Dhabi, Obadi al-Ketbi, chairman of IDEX’s organising committee, was asked if there was any progress since the previous event in 2013 on talks with both companies.

“Talks are still going on, no update,” Ketbi told reporters at a media event on the sidelines of the conference.

Negotiations over fighter jets between the UAE and Western defence firms have been long and tumultuous, with talks going on with various degrees of seriousness for years.

A source told Reuters last week that the French firm had resumed discussions with the Gulf state over sales of Rafales.

Dassault was publicly rebuffed in December 2011 over a deal to buy 60 of the multi-role combat jets by Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed, also deputy supreme commander of the UAE armed forces, who called Dassault’s terms “uncompetitive and unworkable”.

Meanwhile, a $9.8 billion deal for 60 Eurofighter Typhoon jets was declared dead in December 2013 by BAE.

Western defence contractors are chasing overseas sales to keep production lines moving when domestic budgets are being cut.

European companies Airbus and Thales did have a deal to celebrate. They signed a Dhs3.745 billion ($1 billion) deal for the UAE to purchase two satellites and their land control stations, according to Ketbi.

This contributed to a combined 9.48 billion dirhams of defence deals signed by the UAE during IDEX, Ketbi said.

This spending comes when a declining oil price has put pressure on government spending across the Gulf region, but also when authorities are facing regional political instability in Iraq and Syria. The UAE is one of the nations undertaking bombing runs against Islamic State targets.

In total, around Dhs6 billion of defence contracts went to UAE-based companies, which included for ships, maintenance and spare part contracts.

Abu Dhabi’s Al Taif Technical Services won a contract worth Dhs2.4 billion for maintenance of defence-related equipment and Nimr Automotive, part of the newly-formed Emirates Defence Industries Company, won a Dhs1.2 billion contract for 500 armoured vehicles.