Lockheed to pay MoD over delays

The Ministry of Defence is to receive substantial compensation payments from Lockheed Martin, the US defence contractor, over delays to the delivery of replacement Hercules Transport aircraft, writes Chris Godsmark.

The first of 25 planes from the pounds 1bn contract should have been handed over to the RAF last November, but Lockheed warned yesterday that it still could not give a firm delivery date. The aircraft are now unlikely to enter service until 1998. Lockheed is to hold talks with MoD officials next month to discuss compensation.

Bill Bullock, president of Lockheed Martin Aeronautical systems, blamed the delays partly on the certification process with the US regulator. The penalties are thought likely to run into millions of dollars.

Lockheed revealed yesterday that UK aerospace companies had won almost $500m (pounds 313m) of orders from the Hercules contract, of which more than $200m had been confirmed last year. Dowty, part of the TI group and GKN's Westland arm have both received substantial orders.