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F16 Deal Brings Potential Business Spin-offs

The F16 leasing deal could bring multi-million dollar spin-offs for New Zealand companies, Minister of Defence Max Bradford said today.

The 10 year lease agreement for the 28 F16A/B Fighting Falcon aircraft was officially signed last week. The signing in Washington DC was witnessed by Attorney-General, Rt Hon Sir Douglas Graham.

Mr Bradford said there was potential for New Zealand companies to be involved in
the manufacture of ground support equipment and ongoing maintenance for their systems and components.

"This sort of work would amount to millions of dollars for New Zealand," he said.

"For example; the new naval helicopter programme alone is expected to inject $100 million into New Zealand's defence industry over the next 10 years.

"The lease agreement for the F16s gives us near-new aircraft in 2001 at a price we simply couldn’t afford to pass up. It also avoids the $54 million upgrade our 1950s-designed Skyhawks would have needed to keep them flying until 2006/7.”

Mr Bradford said the deal was a particularly good one for New Zealand and would save the Government around NZ$350 million during the life of the aircraft compared with purchasing new aircraft next century. The lease deal is the least cost option to acquire this increase in air combat capability.

The deal includes a “start-up” package totalling an estimated $238 million (excluding GST). The package includes the cost of refurbishing the engines and systems of the aircraft, which are currently in storage in the United States, pilot and maintenance staff training, spares and essential support equipment such as Computerised Mission Planning Systems and a Simulator to reduce training costs.

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