Saudis' $6Bn Boost for US Air Industry

Article excerpt

Saudi Arabia is to buy 61 civil aircraft from two US manufacturers in a $6bn (pounds 3.8bn) deal that the White House said yesterday would create thousands of jobs in the ailing aerospace industry.

Spin-off work worth about pounds 90m will go to UK aero-engine maker Rolls- Royce. Other contractors, including Smiths Industries, will also benefit.

Meanwhile, concern continued in the US over last week's breakdown of talks with the UK to liberalise air services. A US official warned that the Bermuda II agreement governing services may be ripped up.

The huge Saudi deal was signed on Wednesday night by President Clinton and a member of the Saudi royal family. Saudia, the state airline, has ordered 23 of Boeing's 777-200 twin jets and five 747-400 jumbo jets. An order for 29 MD-90s and four MD-11s has been placed with McDonnell Douglas. The first planes will be delivered to the airline in 1997.

The aircraft market is in deep recession, with the trough not expected to be reached until 1996, so the order was welcomed by the industry.

The problems were underlined yesterday when France's Aerospatiale announced 4,000 jobs cuts. …