UK Inks Deal for Poseidon, Apache Aircraft Despite Brexit Concerns

FARNBOROUGH, England -- The British government announced two much-anticipated purchases of Boeing military aircraft on the first day of the Farnborough International Airshow, just weeks after a referendum vote to leave the European Union threw markets into tumult.

United Kingdom Defence Secretary Michael Fallon announced Monday that the Ministry of Defence had confirmed the purchase of nine P-8A Poseidon maritime patrol aircraft for the Royal Air Force and 50 AH-64E Apache attack helicopters.

According to U.K. officials, the cost to acquire, maintain and man the Poseidon aircraft, to be based at Scotland's Lossiemouth airfield, will be about $4 billion over the next decade. The contract for the 50 Apache aircraft is worth $2.3 billion, according to announcements.

These contracts, which fulfill needs identified in the British government's 2015 Strategic Defense and Security Review, were widely expected to be announced at Farnborough. But some speculated that market uncertainty in the wake of the Brexit vote, which prompted the pound to fall more than 10 percent against the dollar, might result in delay or alteration of the planned contracts.

"Some of these contracts may [now] weigh a little heavily on other planning," Forecast International analyst Dan Darling told Military.com earlier this month.

In public statements announcing the contracts, Fallon struck optimistic notes.

The Poseidon aircraft, he said, would protect British aircraft carriers -- worth about $8 billion each -- and bring economic benefits to Scotland with the basing of 400 additional personnel at Lossiemouth to maintain them.

"They are part of our plan for stronger and better defence, backed by a budget that will rise each year of this decade," Fallon said in a statement. "That means more ships, more aircraft, more troops available at readiness."

The Apache choppers, which will enter service with the British Army by 2022, will be built in Boeing's Mesa, Arizona plant, but maintained and serviced in the U.K., Fallon said in his statement. The use of the existing American production line will allow the British government to benefit from economies of scale, he added.

"This is a momentous day for the U.K. Armed Forces," Chief Executive Officer for MOD's Defence Equipment and Support Organization Tony Douglas said. "These latest generation helicopters [are] set to provide troops with a world-beating capability for decades to come."

-- Hope Hodge Seck can be reached at hope.seck@military.com. Follow her on Twitter at @HopeSeck.

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