Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Canada says wants to move fast on jet contest, gives no details

Published 2016-07-13, 06:09 p/m
© Reuters.  Canada says wants to move fast on jet contest, gives no details
BA
-
AIR
-
LMT
-
AM
-
SAABBs
-

By David Ljunggren and Andrea Shalal

OTTAWA/FARNBOROUGH, England, July 13 (Reuters) - Canada said on Wednesday it wanted to move quickly to buy a new fleet of fighter jets but gave no details, leaving major questions about what plane Ottawa will buy as well as how and when.

The previous Conservative government announced in 2010 it would buy Lockheed Martin (NYSE:LMT) Corp's LMT.N F-35 to replace Canada's aging CF-18s but later scrapped the decision.

Subsequent efforts to choose a plane stalled and the Liberal government, which took power last November, says it wants to start again.

Defence Minister Harjit Sajjan told reporters on Wednesday there was "an urgent need" to replace the CF-18s, saying a decision on how to proceed would be made within months. He gave no details.

Late last week the government sent out a detailed questionnaire to five potential suppliers and asked them to reply by July 29.

"No decision has been made at this time and all procurement options are being considered," said the document, which was seen by Reuters.

U.S. and European industry sources said the July 29 deadline was very tight by defense procurement standards, adding they did not know what Ottawa intended to do with the results of the questionnaire.

One option is unveiling an open competition - which a European industry source said "would cost millions" to participate in - while another is announcing a sole-source order for one of the jets.

Another source familiar with the process said Canada was unlikely to reach a decision and pick a winning bidder until next year at the earliest.

The five potential suppliers are Lockheed Martin, Boeing (NYSE:BA) Corp BA.N , Eurofighter AIR.PA , Saab AB SAABb.ST and Dassault Aviation SA AVMD.PA . Sajjan's officials have denied reports saying Ottawa has decided to buy Boeing's Super Hornet as an interim measure.

Although the Liberals vowed during last year's successful election campaign to hold an open competition and said they would not buy the F-35, it is notable that Ottawa is talking to Lockheed Martin.

Pentagon acquisition chief Frank Kendall said at the Farnborough Airshow on Sunday he believed the Canadian military preferred the F-35.

The Canadian questionnaire stresses the winner must provide considerable work to domestic firms. Canada is one of the nine original partner countries that helped fund development of the F-35.

Lockheed Martin has said Canadian firms would account for work on the program worth about $1 billion by end-2016 but added that this could be at risk if Ottawa buys another jet. (Writing by David Ljunggren)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.