Wednesday, March 10, 2010

DTN News: US-Europe Tensions Rise Over Arms Deals, Exports

* Britain's Mandelson disappointed by tanker deal collapse
* State Department studying BAE judgment
Source: DTN News / Int'l Media By Rhys Jones Reuters
Defense News ~ (NSI News Source Info) LONDON, UK - March 10, 2010: The United States and Europe face growing tensions over restrictions on export deals involving BAE
Systems while European politicians protest the collapse of efforts to sell aerial tankers to the United States.
The U.S. State Department said on Tuesday it would delay action on any new export license requests by BAE Systems after the British military contractor pleaded guilty to violating several U.S. laws.
"We understand that there has been no change to existing export licenses and agreements, and that export activities may continue under existing authorisations," BAE said in a statement, but added that it did not know when the State Department would issue any new licenses.
The UK has also expressed its concern at the United States's handling of a military tanker contract, after EADS's U.S. partner Northrop Grumman dropped out of the race to build a tanker, leaving U.S. rival Boeing as the sole bidder.
"Given the open market to U.S. producers we have in Europe, it is very disappointing that a U.S.-led European consortium feels that the revised tanker procurement process is now so biased against them that it is not even worth making a bid," Britain's business secretary Peter Mandelson said in a statement on Wednesday.
France's Prime Minister Francois Fillon echoed Mandleson's comments during a visit to Berlin's Humboldt University.
"I think the attitude of the U.S. government on the matter of the air tankers is a serious breach of the rules, which are those of fair competition between our economies," said Fillon.
"The American government, I am saying it, has obliged EADS to quit the competition for the American army's air tankers."
BAE Systems earlier this month pleaded guilty to conspiring to make false statements in connection with foreign arms contracts and agreed to pay a $400 million fine to settle a long-standing inquiry into its business practices.
State Department spokesman P.J. Crowley said the department was studying the judgment entered in federal court in the District of Columbia and would not move forward on any export license approvals for now.
"This may have an effect where U.S. licenses are required to sell UK products into export markets that require International Trade and Arms Regulation licenses, which the U.S. has been reluctant to give out," said Evolution analyst Nick Cunningham.
The potential row with BAE, which is seen as the most successful European company in penetrating the world's largest defence market, due to Britain's close ties to the United States, comes after a spat between the two allies over sensitive software codes for the F-35 fighter jet.
The Pentagon recently said it would keep to itself the software code that controls Lockheed Martin Corp's new radar-evading F-35, despite requests from co-development partners -- Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway.
BAE has increasingly turned its back on its European roots to foster closer business ties with the U.S and itself sold a 20 percent stake in Airbus in 2007.
BAE last week said it had sold half of its 20.5 percent stake in Saab, the Swedish aerospace company, and also plans to offload the rest of its investment through a market placing. (Additional reporting by Tim Hepher; Editing by Rupert Winchester)

DTN News: Boeing Delivers EGYPTAIR's First 777-300ER For Long-Haul Fleet Upgrade

Source: DTN News / Boeing
Defense News ~ (NSI News Source Info) SEATTLE,- March 10, 2010: EGYPTAIR and leasing company GE Capital Aviation Services (GECAS) took delivery Monday of the first Boeing (NYSE: BA) 777-300ER (Extended Range) commercial jetliner to join EGYPTAIR's fleet. EGYPTAIR operates a fleet of five Boeing 777-200ERs, five 737-500s and 12 737-800s, with another eight 737-800s on order directly from Boeing. The Egyptian flag carrier is leasing the new 777-300ER from GECAS and will take an additional five 777-300ERs on lease through the second quarter of 2011 to continue upgrading its long-haul service.
"This delivery is a substantial milestone in the history of EGYPTAIR. We will continue to bring the latest to our customers who deserve the best of everything. This is a continuation of the long term partnership with Boeing," said Hussein Massoud, chairman of EGYPTAIR Holding Company.
"The 777-200ER has always been one of the strongest performers in our fleet for fuel efficiency and reliability. The 777-300ER's additional improvements in fuel efficiency and seat-mile costs will directly benefit our bottom line," said EGYPTAIR Airlines Chairman Capt. Alaa Ashour. "The 777-300ER is an important part of our fleet modernization and growth plans to achieve greater profitability."
EGYPTAIR's new 777-300ER has 346 seats including 49 lie-flat beds with a 78-inch seat pitch, plus an in-seat entertainment system throughout the cabin. A member of the Star Alliance, EGYPTAIR will operate 777-300ERs on routes to London, Tokyo and North America.

DTN News: U.S. Department of Defense Contracts Dated March 10, 2010

Source: U.S. DoD issued March 10, 2010
Defense News ~ (NSI News Source Info) WASHINGTON - March 10, 2010: U.S. Department of Defense, Office of the Assistant Secretary of Defense (Public Affairs) Contracts issued March 10, 2010 are undermentioned;
~Guam Pacific International, LLC*,
Barrigada, Guam (N40192-10-D-2800);
~Bulltrack-Watts, JV*, Marysville, Calif. (N40192-10-D-2801);
~Niking Corp.*, Pearl City, Hawaii (N40192-10-D-2802);
~Overland Corp.*, Ardmore, Okla. (N40192-10-D-2803);
~P&S Construction Inc.*, Lowell, Mass. (N40192-10-D-2804); and
~Pacific West Builders*, National City, Calif. (N40192-10-D-2810), are each being awarded an indefinite-delivery/indefinite-quantity, multiple award construction contract for new construction, renovation/modernization and routine repair/maintenance of government shore-based facilities in Guam. The dollar value for all six contracts combined is $100,000,000. The contract also contains four unexercised option periods which, if exercised, would increase cumulative contract value to $500,000,000. Guam Pacific International, LLC, is being awarded task order 0001 at $12,959,699 for the complete design and construction of a combat support vehicle maintenance facility at the northwest field area of Andersen Air Force Base, Guam. Work for this task order is expected to be completed by July 2011. All work on this contract will be performed in Guam, with an expected completion date of March 2015. Contract funds for task order 0001 will not expire at the end the current fiscal year. This contract was competitively procured via the Navy Electronic Commerce Online Web site, with 13 proposals received. These six contractors will compete for task orders under the terms and conditions of the awarded contract. The Naval Facilities Engineering Command, Marianas, Guam, is the contracting activity.
~Raytheon Co., Integrated Defense Systems, Tewksbury, Mass., is being awarded an $81,491,000 contract for DDG 1002 diminishing manufacturing sources (DMS) materials and long-lead/advanced procurement items, DDG 1000 class training equipment and curriculum, and associated DDG 1000 class engineering services. These DMS materials and long-lead/advanced procurement items will be incorporated into the mission systems equipment for DDG 1002. The DDG 1000 class training equipment and associated DDG 1000 class engineering services include continuation efforts to complete DDG 1000 Class combat system training course requirements, data center items, and long-lead training equipment material. Work will be performed in Portsmouth, R.I. (79.1 percent); Falls Church, Va. (14.5 percent); and Andover, Mass. (6.4 percent), and is expected to be completed by March 2012. Contract funds will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington, D.C., is the contracting activity (N00024-10-C-5126).
~The Boeing Co., Ridley Park, Pa., is being awarded an $11,433,264 cost-plus-fixed-fee/firm-fixed-price delivery order against a previously issued basic ordering agreement (N00019-05-G-0012) for the procurement of 58 each overhead (OH) panel kits and main distribution panel (MDP) kits for the CH-46E helicopter. In addition, this order provides for updates to the drawings that define the OH and MDP panels, the item unique identification marking on the panels, and required field support services. Work will be performed in Salisbury, Md. (90 percent), and Ridley Park, Pa. (10 percent), and is expected to be completed in June 2012. Contract funds will not expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.
~Marvin Engineering Co., Inc.*, Inglewood, Calif., is being awarded a $9,895,746 modification to a previously awarded firm-fixed-price contract (N00421-06-C-0050) to exercise an option for 324 production BRU-32 B/A ejector bomb racks and three periodic production samples for the F/A-18 E/F/G aircraft. Work will be performed in Inglewood, Calif., and is expected to be completed in May 2011. Contract funds will not expire at the end of the current fiscal year. The Naval Air Warfare Center Aircraft Division, Patuxent River, Md., is the contracting activity.
~BAE Systems Specialty Defense Systems of Pennsylvania, Inc.,
Jessup, Pa. is being awarded a maximum $27,973,542 firm-fixed-price contract for lightweight helmets. There are no other locations of performance. Using service is Marine Corps. There were originally two proposals solicited with two responses. Contract funds will not expire at the end of the current fiscal year. The date of performance completion is Nov. 30, 2011. The Defense Supply Center Philadelphia, Philadelphia, Pa., is the contracting activity (SPM1C1-10-C-0011).
~River Trading Co., Ltd. *, Cincinnati, Ohio, is being awarded a maximum $16,909,258 firm-fixed-price contract for delivery of bituminous coal. Other location of performance is West Virginia. Using services are Navy, Air Force, Marine Corps, and federal civilian agencies. There were originally 171 proposals solicited with 13 responses. Contract funds will not expire at the end of the current fiscal year. The date of performance completion is May 31, 2011. The Defense Energy Support Center, Fort Belvoir, Va., is the contracting activity (SP0600-10-D-0653).
~Delta Coals, LLC*, Nashville, Tenn., is being awarded a maximum $6,700,248 firm-fixed-price, total set-aside contract for delivery of bituminous coal. Other location of performance is Virginia. Using services are Army and Marine Corps. There were originally 171 proposals solicited with 13 responses. Contract funds will not expire at the end of the current fiscal year. The date of performance completion is May 31, 2011. The Defense Energy Support Center, Fort Belvoir, Va., is the contracting activity (SP0600-10-D-0651).
~AAR Parts Trading, Inc., Wood Dale, Ill., is being awarded a maximum $6,439,950 fixed-price with economic price adjustment, sole-source contract for control assembly and difuser. There are no other locations of performance. Using service is Army. There were originally two proposals solicited with one response. Contract funds will expire at the end of the current fiscal year. The date of performance completion is March 2, 2015. The Defense Logistics Agency, Redstone Arsenal, Ala., is the contracting activity (SPRRA1-10-D-0004).
~Universal Technology Corp., Dayton, Ohio, was awarded a $24,500,000 contract which will provide for short term research and development in key technology areas for the air vehicles director, Air Force Research Laboratory, Wright-Patterson Air Force Base, Ohio. At this time, $50,000 has been obligated. AFRL/PKVC, Wright-Patterson Air Force Base, Ohio, is the contracting activity (FA8650-10-D-3037).
~McDonnell Douglas Corp., St. Louis, Mo., was awarded an $8,823,078 contract which purchase 100 focused lethality munitions-small diameter bomb I variant. At this time, the entire amount has been obligated. 681 ARSS, Eglin Air Force Base, Fla., is the contracting activity (FA8672-10-C-0013, P00002).
~Kuhana Associates, Honolulu, Hawaii, was awarded a $7,149,646 contract which will provide a full range of clinical support services in the form of health care workers. At this time, $2,186,000 has been obligated. 355 CONS, Davis-Monthan Air Force Base, Ariz., is the contracting activity. (FA4877-10-D-0001)
*Small business

UPDATE 1-Airline shares up after UBS raises price targets

* A strong March could mean Q1 profits for Delta-analyst

* UBS sees March unit revenue up 17 pct for major airlines

* Airline index up 14 percent this year (Adds quotes from UBS note, background)

Defense News ~ NEW YORK, March 10 (Reuters) - U.S. airline stocks jumped for a second straight day after UBS raised price targets on several carriers and Jesup & Lamont Securities projected a smaller first-quarter loss for Delta Air Lines Inc (DAL.N).

UBS lifted its price targets on seven airlines including American Airlines parent AMR Corp (AMR.N) and UAL Corp's (UAUA.O) United Airlines. [ID:nWNAB7511]

"Management commentary remains positive regarding the revenue environment and our channel checks support this view," UBS analyst Kevin Crissey said in a research note.

Crissey projects that March unit revenue for major airlines could be up about 17 percent.

AMR shares rose more than 6 percent on the New York Stock Exchange to $10.40, with Delta up almost 5 percent to $13.40. The Arca Airline index was up nearly 4 percent.

Continental Airlines Inc (CAL.N) jumped 5 percent to $22.27 while US Airways (LCC.N) rose nearly 6 percent to $8.15.

Jesup & Lamont analyst Helane Becker narrowed her estimate of Delta's first-quarter loss, citing improved business demand and capacity reductions.

Becker now estimates Delta will report a loss of 12 cents per share. Earlier she projected a loss of 41 cents per share.

"If March ends strongly, the airline could certainly be profitable," Becker wrote.

Traffic reports for the first two months of 2010 signal that air travel demand, especially from business travelers, is improving. During a JPMorgan Chase & Co aviation conference Tuesday, many airline executives also said they were mulling new fees to drum up additional revenue.[ID:nN09234122]

The Arca Airline index has nearly tripled since the S&P 500 .SPX hit a 12-year low in March 2009. It is up 14 percent since the start of the year. (Reporting by Deepa Seetharaman, editing by Gerald E. McCormick, Dave Zimmerman)

U.S. Navy Awards Lockheed Martin $17 Million Contract for MK 41 Vertical Launching System

Defense News ~ BALTIMORE, March 10 /PRNewswire/ -- The U.S. Navy recently awarded Lockheed Martin (NYSE:LMT - News) a $17 millioncontract to provide engineering design services for the MK 41 Vertical Launching System (VLS) on the U.S. Navy's Ticonderoga-class cruisers and Arleigh Burke-class guided missile destroyers.

The cost-plus-fixed fee contract combines purchases for the U.S. Navy and eight Allied navies under the Foreign Military Sales program. Included in the work is missile integration, software development, integration of VLS into new ships, technical refresh, systems engineering and life cycle support for MK 41 VLS.

MK 41 Vertical Launching System Information

MK 41 Vertical Launching System Videos

"The MK 41 is the most proven below-deck, multi-mission launching system in the world," said Dan Schultz, vice president and general manager of Lockheed Martin's Ship and Aviation Systems business. "Working closely with the U.S. Navy, we have led the system design team and have been delivering, modernizing and supporting the MK 41 VLS system for more than 30 years. Its capability is second to none."

The contract includes options which, if exercised, would bring the total contract value to $104 million over four years. The work will be performed at Lockheed Martin's locations in Baltimore, MD and Ventura, CA.

The multi-missile MK 41 launcher has revolutionized the way world navies think about sea-launched weapons, providing the capabilities to respond to numerous naval warfare threats including anti-air, anti-submarine, ship self-defense, land attack and ballistic missile defense. More than 12,000 MK 41 VLS missile cells have been delivered or are on order. MK VLS systems are either in service or on order by 12 navies around the world for 186 ships in 19 different classes.

Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 140,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation reported 2009 sales of $45.2 billion.

For additional information about Lockheed Martin, visit:

BAE Systems Awarded $10.5 Million Contract for Armor Panels

BAE Systems

Defense News ~ CINCINNATI, Ohio - BAE Systems has been awarded a $10.5 million contract by Textron Marine and Land Systems to manufacture and deliver approximately 240 armor protection kits for Armored Security Vehicles (ASVs).

As part of the agreement, BAE Systems' Security & Survivability business will produce armor kits for the M1117 ASV-a turreted, armored, all-wheel drive vehicle-and armor kits for the M1200 Armored Knight-an ASV variant equipped with a sensor package that is used to locate and designate targets for indirect fire and laser guided weapons. After delivering the armor kits to Textron, BAE Systems' appliqu armor panels will be installed, and the armored up ASVs will be delivered to the U.S. Army Tank-Automotive and Armaments Command (TACOM).

Through its established relationship with Textron, BAE Systems has been building ASV armor panels for more than six years. "We are honored to once again have the opportunity to provide armoring systems for these important lifesaving vehicles," said Don Dutton, vice president of Platform Survivability for BAE Systems' Security & Survivability business. "We take great pride in knowing that the ASV is highly regarded as a safe, reliable and combat-proven vehicle that continues to protect our servicemen and women in Afghanistan, Iraq and throughout the world," added Dutton.

The ASV is often used to support Military Police missions, as well as a variety of other essential military operations.

Work on the contract is being performed at BAE Systems' facilities in Phoenix, Arizona. Deliveries of ASV armor kits will begin in March 2010 and are expected to be completed by July 2010.

BAE Systems' Security & Survivability business is a leader in protection, security and survivability systems for land, air and naval applications. It is a technology leader in lightweight materials, including composites, ceramic and transparent armor technologies; integrated vehicle armor systems; vehicle and aircraft survivability components and accessories; and soldier protection equipment, sold primarily to the government and other defense contractors.

About BAE Systems

BAE Systems is a global defense, security and aerospace company with approximately 107,000 employees worldwide. The Company delivers a full range of products and services for air, land and naval forces, as well as advanced electronics, security, information technology solutions and customer support services. In 2009 BAE Systems reported sales of £22.4 billion (US$ 36.2 billion).

For further information, please contact

Jennifer Robinson, BAE Systems
Tel: +1 513 341 4073 Mobile: +1 513 833 5389

Susan Lenhardt, BAE Systems
Tel: +1 301 838 6907 Mobile: +1 703 850 1621

French PM blasts U.S. over aerial tanker competition

Defense News ~ BERLIN, March 10 (Reuters) - French Prime Minister Francois Fillon criticized the United States' handling of a multi-billion-dollar aerial tanker competition that saw Northrop Grumman (NOC.N) and European partner EADS (EAD.PA) drop out of the race.


"I think that the attitude of the American government on the matter of the air tankers is a serious breach of the rules, which are those of fair competition between our economies," Fillon said during a visit to Berlin's Humboldt University.

"The American government -- I am saying it -- has obliged EADS to quit the competition for the American army's air tankers," he added on Wednesday. Northrop Grumman withdrew from the competition earlier this week, charging the united States Air Force's rules of favouring rival Boeing (BA.N). [ID:nN08190077]

EADS subsequently ruled out making a solo bid for the contract. [ID:nLDE62805F] (Reporting by Sophie Louet)

Macquarie upgrades Lockheed, citing re-based jet program

Defense News ~ ATLANTA, March 10 (Reuters) - Macquarie Research raised its rating on defense contractor Lockheed Martin Corp (LMT.N) to "neutral" from "underperform" on Wednesday, saying negative news reports on the company's Joint Strike Fighter program were poised to subside.

The U.S. Defense Department has restructured the fighter-jet program to extend its development phase. In recent months, concern about the project, which is the Pentagon's most expensive weapons program, had mounted amid declining tolerance in Washington for cost overruns and schedule delays.

"In our opinion, the period of negative news flow for the JSF is coming to an end, and with the program re-based, we think investors can be more comfortable with the lower risk, but lower growth outlook," Macquarie analyst Rob Stallard said in his note upgrading the stock.

Stallard had cut the rating on Lockheed to "underperform" from "outperform" in December, saying the program for the radar-evading fighter was vulnerable to cuts and delays.

Lockheed shares were up 29 cents to $82.51 in morning New York Stock Exchange trading. The stock has risen about 9 percent so far this year. (Reporting by Karen Jacobs; Editing by Lisa Von Ahn)