Aviation

India selects France's Dassault for major Jet deal

India has selected the French firm Dassault over the Eurofighter consortium as the preferred bidder for 126 fighter jets in a major contract estimated to be worth $12 billion.

Dassault won the right to enter exclusive negotiations with India after lodging a lower bid than its European rival in the world's biggest single defence deal currently in process, an Indian government source told AFP on Tuesday.

Dassault, whose Rafale fighter had been pitted against the Eurofighter Typhoon, said it was "honoured and grateful" to be selected and stressed its commitment to meeting the "operational requirements" of the Indian Air Force.

The French government welcomed the news, but added that the final contract had yet to be signed.

"At this stage - and I want to be cautious - we are in a phase of exclusive negotiations," French Minister of State for Foreign Trade Pierre Lellouche told France's BFM radio.

Lellouche declined to release financial details of Dassault's bid.

Dassault Aviation shares soared more than 20 percent on the Paris Stock Exchange after the news broke.

The huge contract to supply war planes to fast-developing India has been fiercely fought over for four years.

India in April pulled a surprise by cutting out US bidders Boeing and Lockheed Martin - much to Washington's disappointment - as well as dropping Sweden's Saab AB and the Russian makers of the MiG 35 from the race.

That left Dassault and Eurofighter - a consortium of Britain's BAE Systems, Italy's Finmeccanica and the European Aeronautic Defence and Space Company (EADS). James Hardy, Asia-Pacific editor of Jane's Defence Weekly, said the decision was "a big win for the Rafale" but warned that the French side faced a period of tough negotiation.

"Rafale has been selected as the preferred bidder but any student of Indian procurement knows that this means nothing until the contract is physically signed," Hardy said. He predicted that the recent sharp depreciation of the Indian currency and "standard contractual wrangling" could delay any final deal for years.

Hardy said the Typhoon had been widely tipped as the favourite, and that the decision was a major blow to countries such as Britain who had lobbied hard for the Eurofighter bid.

The tendered contract was for the outright purchase of 18 combat aircraft by 2012 with another 108 to be built in India with options to acquire more.

Such a large order attracted strong lobbying during visits to India by US President Barack Obama, French President Nicolas Sarkozy, British Prime Minister David Cameron and Russian President Dmitry Medvedev.(AFP)

Airline passenger traffic up nearly 6% : IATA

Global airline passenger traffic rose 5.9 percent last year despite weak conditions, the International Air Transport Association said Wednesday, with 2012 likely to be difficult for the industry.

"Given the weak conditions in Western economies the passenger market held up well in 2011," IATA said in a statement, describing the year as one of contrasts. "Healthy passenger growth, primarily in the first half of the year, was offset by a declining cargo market," it said.

The Geneva-based association, which represents some 240 airlines accounting for 84 percent of global air traffic, noted that cargo fell 0.7 percent last year although it picked up 0.2 percent in December alone.

Passenger traffic in December rose 5.4 percent compared to the same month in 2010. "But the trend since mid-year has clearly slowed, as travel markets react with a lag to the declines in confidence that weakened cargo in the second half of 2011," IATA said.

The emerging markets of Brazil, India and China all showed double-figure growth in traffic for both passengers and freight, while Japan declined 15.2 percent as a result of the earthquake thee in March. "Cautious improving business confidence is good news. But 2012 is still going to be a tough year," Tony Tyler, IATA's director general and CEO said in the statement.

He noted that airlines transport about three billion people a year and that more than a third of the value of goods traded internationally is transported by air.

Brazil's Embraer buys EADS share of Portugal's OGMA

Aviation conglomerate Embraer has bought the 30 percent share that European aerospace giant EADS held in Portugal's OGMA aircraft maintenance company, the Brazilian company announced Monday. The deal that Embraer's Defense and Security unit signed with EADS on January 27 increases the Brazilian company's stake in OGMA to 65 percent.

"This is an additional investment in Portugal to strengthen the strategic partnership between Brazil and the European Union," said Luiz Carlos Aguiar, president of Embraer Defense and Security. The Portuguese government holds the remaining 35 percent stake in OGMA, which provides maintenance and repair for military and civilian aircraft, as well as manufacturing and assembly of aircraft structures.

The transaction will be complete following approval by Portuguese competition regulators, which should come within the next 30 to 90 days. AFP