BAE Systems has won a £4.4 billion contract to supply Eurofighters to Saudi Arabia

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BAE Systems, Europe's largest defence company, has won a £4.4 billion contract to supply Eurofighters to Saudi Arabia, despite failing to agree terms for a reciprocal investment in the kingdom.

The contract for 72 Typhoons is one of the largest defence export orders to have been won by a British company and will be worth an estimated £20 billion over the lifetime of the aircraft.

The Saudis signed the contract last week, although they have not reached an agreement with BAE on the level of investment that the company will make in the kingdom manufacturing and maintaining the Typhoons. Negotiations on the "Saudification" of the £60 million aircraft will continue in the coming months.

The Times reported on September 7 that the contract had been sent to Saudi Arabia and that King Abdullah was expected to sign the historic agreement within a week.

A Saudi defence official confirmed yesterday that the contract was signed on September 11 and initially is worth £4.43 billion. The contract will be called Project Salam, or al-Salam, meaning "peace".

The initial contract will be supplemented with a further order for armaments and weapons systems estimated to be worth £5 billion.

The Saudis are expected to spend a further £10 billion on maintenance, training and support for the aircraft.

The first 24 Typhoons will be built at BAE's factory at Warton, Lancashire, and the remaining jets are likely to be assembled in Saudi Arabia. BAE already employs 4,600 people in the kingdom, but negotiations on how much more the company will invest to build and support the Typhoons are yet to be finalised.

Confirmation that the Saudis have signed the Typhoon contract ends concerns that a Serious Fraud Office (SFO) investigation into BAE's earlier dealings with the Saudis could derail the sale.

The SFO was looking into allegations of corruption and bribery in the al-Yamamah contracts. The Saudis threatened to cancel the Typhoon order and withdraw anti-terrorism co-operation if the SFO pressed ahead with requests to examine the Swiss bank accounts of members of the royal family. The British Government ended the SFO investigation last December.

The deal was held up again this year when the Saudis decided to wait for Gordon Brown to become Prime Minister. They wanted the new British leader to endorse the deal personally as a sign of renewed co-operation between the two nations.

This is understood to have held up completion of the deal in recent weeks, but the Saudis went on with signing rather than risk having to renegotiate the whole deal.

In a statement to the Stock Exchange, the defence group said: "BAE welcomes this important milestone in its strategy to continue to develop Saudi Arabia as a key home market with substantial employment and investment in future in-kingdom industrial capability."

The deal will be a significant boost to the company after a year in which it has faced allegations of corruption in other defence contracts.

Howard Wheeldon, senior strategist at BGC Partners, the brokerage firm, said: "This marks a new era in the UK-Saudi relationship and BAE will be the major beneficiary. It is good for BAE, but it is also good for the Saudis, as they get some of the best equipment in the world."

Al-Salam is the successor to the massive al-Yamamah contract agreed by the Thatcher Government in the 1980s. The deal to supply Saudi Arabia with Tornado fighter jets has been worth more than £43 billion to BAE since it was signed in 1984 and is the largest export order won by a British company.

Eurofighter, which is a collaboration between the British, German, Italian and Spanish governments, has won only one previous export order, of 18 aircraft to Austria.

More about BAE system.

BAE Systems is a global company engaged in the development, delivery and support of advanced defence and aerospace systems in the air, on land and at sea.

Major operations across five continents, with customers and partners in more than 100 countries.

Contacts :

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Australia + 61 (0) 8 8480 888
Saudi Arabia KSAR + 44 (0)1772 854705
Sweden BOFORS + 46 (0)586 733 000
Sweden Hagglunds + 46 (0)660 800 00
Sweden C-ITS + 46 (0)852 802 600
UK + 44 (0)1252 37 3232
US + 001 301 838 6000

Technorati : BAE Systems

Air Taxi Service

Air taxi startup DayJet late last week was in the final stages of proving runs with its small fleet of Eclipse 500 Very Light Jets in preparation for the launch of commercial operations by the end of the month, founder, President and CEO Ed Iacobucci said last week. Completing the proving runs and adding the Eclipse aircraft to DayJet's Part 135 certificate are the final steps remaining for DayJet to begin its "per-seat" air taxi service, Iacobucci told BA in a telephone interview Thursday.
The company had flown more than 25 hours with an FAA inspector on board by last week, he said, adding that the flights "have been going very well." The DayJet Eclipse fleet had accrued 855 flight hours by last week and the first aircraft just underwent a 300-hour check.

Operations could begin on a limited basis later this week if everything goes smoothly, Iacobucci said, but the company is actually targeting the end of the month to begin air taxi revenue flights.
Earlier this year DayJet was shooting for June to begin operations, but that schedule had to be scrapped after the Eclipse 500 experienced pitot heater problems and was limited to flights in visual meteorological conditions (BA, April 16/173). Those problems have since been resolved with a new design for the system. Iacobucci, however, said the pitot problems were only part of the reason for the delay in launch, and added that the additional time has proven useful to DayJet to ensure that all the necessary systems are in place for a smooth transition.
Launch comes just after DayJet secured $140 million in senior debt and financing. "Securing this initial debt facility is a significant milestone for DayJet, as it enables us to continue the uninterrupted growth of the world's first commercial VLJ fleet," Iacobucci said in the announcement of the finance deal. DayJet has taken delivery of nine Eclipses and should add three more this week, he said. DayJet hopes to continue to expand its Eclipse fleet in the upcoming months and have 30 to 40 aircraft by the end of the year -

if everything goes perfectly," he said.
The capital also is helping DayJet increase the number of pilots. DayJet had 30 pilots on staff and is in the process of adding seven more. Those numbers will continue to increase over the next several weeks, he said. The initial crews are comprised of high-time pilots, many of whom have experience with major airlines, while others come from regional airlines, corporate operations or the military. Iacobucci said the company wanted to ensure that the initial cadre of pilots had enough seniority to establish the proper culture for DayJet

Investors Waiting To See
The latest $140 million financing infusion comes on top of the more than $60 million already invested in the company, providing enough funding for the launch. "We're all set right now," Iacobucci said, adding the next round of funding that DayJet might seek would be "growth capital." But that wouldn't come until DayJet has established itself and proven its model over the next several months, he said. Iacobucci was confident that DayJet has attracted sufficient interest among potential investors, but those investors want to observe the company's initial in-service experience. "The next six months will validate whether the projections we made are or are not in synch with reality," he said, but added that he was pleased with early indicators.
DayJet is selling a membership service to potential travelers. Customers must register to fly on the air taxi service. Iacobucci said some 200 companies have subscribed and the number of individual members has grown to about 1,200, nearly double the number of members that DayJet had just a few months ago (BA, April 23/185). DayJet is now concentrating on spooling up its regional sales team to ensure membership is spread out throughout the network rather than concentrated at one location.
DayJet is initially operating permanent "Dayport" bases at five locations in Florida - Gainesville, Lakeland, Boca Raton, Tallahassee and Pensacola. But DayJet envisions expanding those Dayports to more than a dozen, covering four states over the next several months.

FAA in the past year has begun to scrutinize per-seat service - which the agency has termed "fractional charter" - and has narrowly defined what could be considered a Part 135 operation (BA, July 30/41). FAA told a couple of carriers that it viewed their negotiations with a second or third customer as a Part 121 transaction, not Part 135. FAA was primarily concerned that these carriers were guiding second or third customers to an already chartered flight.
Iacobucci said he was "very aware of this problem," calling the issue a complicated one. But he added that DayJet has worked very closely with both FAA and Transportation Department officials to ensure that the company's service is run in accordance with Part 135. The company retained a team of scientists and engineers to develop a sophisticated computer program that will mix and match customers and available aircraft with the customers' travel plans, he said

The service does not lure customers to particular flights, but matches based on customer needs, he said. Under the DayJet model, there is no pre-set flight or fixed schedule. "When DayJet members request flights online, the system 'individually negotiates' a price based on their travel window," Iacobucci said.
The company spent two years and $20 million developing the system, tweaking it as FAA and DOT continued to review the plans, he said. "Instead of saying you have to change the rules for us, we've said we want to embrace your rules," Iacobucci said. "This isn't something that we just whipped together."
Iacobucci acknowledged that DayJet is under a spotlight because the service is a new business model. "There are a lot of people watching us," he said. But that interest also has attracted business, he said, noting that DayJet has no shortage of people who have requested to be aboard the first flight.

Diebold Voting Machines Vulnerable to Virus Attack

Diebold Election Systems Inc. voting machines are not secure enough to guarantee a trustworthy election, and an attacker with access to a single machine could disrupt or change the outcome of an election using viruses, according to a review of Diebold's source code.
"The software contains serious design flaws that have led directly to specific vulnerabilities that attackers could exploit to affect election outcomes," read the University of California at Berkeley report, commissioned by the California Secretary of State as part of a two-month "top-to-bottom" review of electronic voting systems certified for use in California.
The assessment of Diebold's source code revealed an attacker needs only limited access to compromise an election.
"An attack could plausibly be accomplished by a single skilled individual with temporary access to a single voting machine. The damage could be extensive -- malicious code could spread to every voting machine in polling places and to county election servers," it said.
The report, titled "Source Code Review of the Diebold Voting System," was apparently released Thursday, just one day before California Secretary of State Debra Bowen is to decide which machines are certified for use in California's 2008 presidential primary elections.
The source-code review identified four main weaknesses in Diebold's software, including: vulnerabilities that allow an attacker to install malware on the machines, a failure to guarantee the secrecy of ballots, a lack of controls to prevent election workers from tampering with ballots and results, and susceptibility to viruses that could allow attackers to an influence an election.
"A virus could allow an attacker who only had access to a few machines or memory cards, or possibly to only one, to spread malicious software to most, if not all, of a county's voting machines," the report said. "Thus, large-scale election fraud in the Diebold system does not necessarily require physical access to a large number of voting machines."
The report warned that a paper trail of votes cast is not sufficient to guarantee the integrity of an election using the machines. "Malicious code might be able to subtly influence close elections, and it could disrupt elections by causing widespread equipment failure on election day," it said.
The source-code review went on to warn that commercial antivirus scanners do not offer adequate protection for the voting machines. "They are not designed to detect virally propagating malicious code that targets voting equipment and voting software," it said.
In conclusion, the report said Diebold's voting machines had not been designed with security as a priority. "For this reason, the safest way to repair the Diebold system is to reengineer it so that it is secure by design," it said.
The Diebold source-code review and several other documents, including a review of source code used in other voting systems, had earlier been withheld from release by the Secretary of State, even as other reports related to the review of voting machines were released on July 27.
An explanation posted on the Secretary of State's Web site on July 27 noted the source-code review and other reports had been submitted on time. "Their reports will be posted as soon as the Secretary of State ensures the reports do not inadvertently disclose security-sensitive information," the Web site said.
The delayed release of the source-code review meant that David Wagner, an associate professor of computer science at the University of California at Berkeley and an author of the report, was not able to present his findings at a public hearing held on July 30 to discuss the results of the voting system review

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Study: Florida Voting Machines Still Flawed

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It's not exactly a vote of confidence for Florida's optical scan voting machines, the ones that helped to replace those punch-card ballots with their notorious hanging chads. A government-ordered study finds the optical scan machines are still flawed, despite efforts to fix them. What's more, the machines are subject to potential tampering by poll workers. Florida Secretary of State Kurt Browning has asked Diebold Elections Systems to address the problems by August 17th. He's expressing confidence the company will do so before next year's primary election. A company spokesman says the deadline will be met. Currently, 15 of Florida's 67 counties use paperless touch-screen voting machines, while the rest use optical scan machines. Touch-screen machines are being scrapped because of a newly signed state law that requires a verifiable paper trail for all voting machines.