February 15, 2018 / 1:05 PM / 6 months ago

Austria to review decision to scrap Eurofighter jets early

VIENNA (Reuters) - Austria’s new government will re-assess the previous government’s decision to end a $2 billion Eurofighter jet program early, the defense minister said, signaling willingness for talks amid a legal battle with the manufacturers.

However, Austria will not consider a new deal with the Eurofighter consortium, which includes Airbus (AIR.PA) , Britain’s BAE Systems BAE.L and Italy’s Leonardo (LDOF.MI) before compensation for damages has been paid, the republic’s chief lawyer said.

Defence Minister Mario Kunasek’s Social Democratic predecessor Hans Peter Doskozil started an unprecedented legal battle with Airbus and the consortium a year ago, accusing them of fraud and wilful deception in connection with a $2 billion 2003 Eurofighter order.

Austrian investigators started a legal probe of the consortium and individuals including Airbus Chief Executive Tom Enders based on the ministry’s allegations soon afterwards.

Airbus and the consortium deny the Austrian allegations. However, Airbus agreed to pay $99 million to settle a German investigation into alleged corruption surrounding the Austrian purchase earlier this month.

Austria initially ordered 18 Eurofighter jets but reduced the order to 15 in 2007.

Last July, Doskozil said Austria planned to end its Eurofighter program early and replace it with a cheaper alternative fleet of aircraft bought or leased from another government.

The defense ministry said then that Austria’s 15 Eurofighter jets could be phased out from 2020. The continued use of the planes for 30 years - the normal life span of such jets - would cost up to 5 billion euros ($6.24 billion), largely for maintenance.

Kunasek, a member of the far-right Freedom Party, presented a new commission that will examine options for Austria’s air defense.

He said it will take into account the findings of a task force set up by Doskozil, but that he does not feel bound by Doskozil’s decision to end the Eurofighter program early.

“Today, new information is available which requires a reassessment,” Kunasek said at a news conference in Vienna.

The defense ministry said the Eurofighter consortium had offered to update the current jets and renegotiate operating costs since the former minister’s task force ended its work.

It said it had also received new price information for Swedish and American jets, which will be taken into account.

Asked about the possibility of a new deal with the Eurofighter consortium, Austria’s chief lawyer Wolfgang Peschorn said: “There will be no new procurement before compensation has been made.”

Airbus (AIR.PA) CEO Enders said on Thursday that further Eurofighter orders, both from new export customers and repeat orders by launch customers, could be on the cards soon.

Britain submitted its final offer of Eurofighter Typhoon jets to Belgium on Wednesday, in a proposal which includes 34 planes and support services. Last December, Germany signaled readiness to buy the Eurofighter.

($1 = 0.8010 euros)

Reporting by Kirsti Knolle; Editing by Adrian Croft

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