Thursday 09 May 2019 3:18 pm | Updated: Wednesday 05 June 2019 9:04 am

BAE Systems working with government to continue Saudi arms deal despite German ban

Defence giant BAE Systems is working with the government to find a way to continue servicing Saudi Arabia's fleet of Eurofighter Typhoon military jets, despite Germany extending a ban on arms deals with the Gulf kingdom.

The ban, which was originally imposed after the killing of Saudi journalist Jamal Khashoggi last year, was extended by six months in March.

The firm is the lead partner for the pan-European consortium working on the Eurofighter in Saudi Arabia, and is tasked with maintaining the countries fleet of 72 jets, a job which includes supplying new parts. Berlin’s decision to stop exports has been problematic the the consortium, whose supply chain relies on German cooperation.

After a memorandum of understanding was signed last year, 48 more of the jets are likely to be sold to Riyadh for an undisclosed figure which analysts think could be around £5bn, but the German embargo could also get in the way of this.

Reiterating its earnings targets for 2019 today, Britain’s biggest defence firm said it was still at risk of geopolitical uncertainties with regard to the Saudi deal.

“Following the recent updates from the German government regarding export licences, we are working closely with industry partners and the UK government to continue to fulfil our contractual support arrangements in Saudi Arabia on the key European collaboration programmes,” BAE said.

In January, BAE chairman Roger Carr said: “What we want to see, by being a consistent and critical friend, is that Saudi Arabia, needs to return to the pathway it was on and develop in the way it was.”

Carr said that the killing of Washington Post journalist Khashoggi and Riyadh’s involvement in the war in Yemen were harming the country’s international standing.

BAE today told investors its guidance of mid-single digit growth in underlying earnings per share and a slight increase in net debt this year was unchanged from February, after it started the year by trading in line with expectations. Shares in the firm rose 0.6 per cent this morning.