AgustaWestland lands deal for US presidential fleet

The Anglo-Italian helicopter manufacturer AgustaWestland pulled off a stunning coup last night after winning a $1.6bn (£850m) order to replace the US presidential helicopter fleet.

AgustaWestland, part of the Finmeccanica group, was selected in preference to the US contractor Sikorsky, a division of United Technologies, which has built and maintained the familiar green and white Marine One presidential fleet for more than 50 years.

The selection of AgustaWestland's US101 for the prestige order for 23 helicopters follows intensive lobbying of President George Bush by both Tony Blair and the Italian Prime Minister Silvio Berlusconi, and will be seen by some quarters as a reward for their strong support for the US invasion of Iraq.

AgustaWestland has teamed up with the American defence contractors Lockheed and Bell to bid for the prestige contract and pledged that two-thirds of the work will be carried out within the US.

The contract is the first to be put out to open tender since the 1970s. Awarding it to a non-US company represents a savage blow for UTC. The company's chief executive George David said last month that the order was "win or drop dead as far as we are concerned" following the cancellation of the Comanche helicopter programme between Sikorsky and Boeing.

AgustaWestland's success will put it in a strong position to win a bigger order, worth about $6bn, to supply the US Air Force with 200 combat search and rescue helicopters.

The rotor blades and transmission for the US101s will come from Westland's Yeovil factory in Somerset, where the order will help secure thousands of jobs.

Earlier in the day, Finmeccanica completed the £633m purchase of BAE Systems' avionics interests. Finmeccanica has agreed to pay BAE an initial £379m for a 75 per cent stake in their jointly owned avionics business and a further £269m when it buys the remaining 25 per cent.

In a separate deal, BAE will pay the Italian company £50.5m for full control of the UK part of their jointly owned systems integration and command and control business. Finmeccanica will take over the Italian part of the joint venture. The Italian group will also take 100 per cent control of two other ventures with BAE specialising in air traffic control, defence communications and battlefield systems.

BAE said it would use the proceeds to pay down debt, which stood at £1.1bn at the end of June 2004. The businesses being divided up between BAE and Finmeccanica are worth £1.7bn.