BAe links up with Boeing in hope of winning RAF missile contract

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The Independent Online

British Aerospace will today step up its efforts to win a £1bn missile order from the RAF with the announcement of an alliance with Boeing, the world's leading aircraft maker.

British Aerospace will today step up its efforts to win a £1bn missile order from the RAF with the announcement of an alliance with Boeing, the world's leading aircraft maker.

The deal with the US giant could mark a turning point in the battle between a BAe-led European consortium and the American defence group Raytheon over the contract to arm the new Eurofighter aircraft with an air-to-air missile.

Industry experts believeBoeing's decision to join the European group could prevent the US government from lobbying in Raytheon's favour.

Up to now, the Clinton administration is understood to have put pressure on the British Ministry of Defence to award the missile contract to the US defence giant.

However, the arrival of Boeing on the rival consortium - which also includes the Anglo-French group Matra BAAe Dynamics, Germany's Dasa, Spain's Casa and the Italian group Alenia - could weaken Raytheon's case in the run-up to the MoD's decision, due by the end of the year. Industry sources said yesterday that the Boeing deal could open up worldwide markets worth up to £10bn to the European consortium's Meteor missile system.

The agreement follows Raytheon's offer to supply the Eurofighter's missiles for half the price and give the UK a 50 per cent share of all its new weapons contracts in the US.

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