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UK MoD agrees £13bn FSTA deal with AirTanker
By Gerrard Cowan
28 March 2008
The UK Ministry of Defence (MoD) has signed a GBP13 billion (USD26 billion) contract with the AirTanker consortium for the provision of 14 Airbus A330-200 air-to-air refuelling and transport aircraft.
The deal was announced on 27 March, following the conclusion of a six-month financing competition through which the consortium raised GBP2.5 billion. This makes the Future Strategic Tanker Aircraft (FSTA) programme the world's largest ever defence private finance initiative (PFI).
An aspect of the agreement would see some of the aircraft operating commercial air transport tasks when not subject to operational requirements. The MoD would only pay for the amount it uses the aircraft, subject to minimum usage levels.
The UK Minister for Defence Equipment and Support, Baroness Taylor, said: "Achieving a satisfactory outcome to this complex, high value PFI deal has been challenging, particularly given the factors currently affecting the financial markets."
The new aircraft will enter service from 2011, replacing the previous fleet of VC10 and Tristar refuelling aircraft.