Qatar lifeline for 'troubled' BAE as Saudi Arabia deal stalls

As a Saudi follow-on order for Typhoon fighter jets failed to materialise this year, a Qatari order for these jets and Hawk trainer airplanes may provide a lifeline for troubled British defence company BAE Systems.

BAE said on Tuesday it is cutting almost 2,000 jobs in its military, maritime and intelligence services amid a slowdown in orders for its Typhoon fighter jets.

CEO Charles Woodburn said in a statement that the cuts are necessary to "align our workforce capacity more closely with near-term demand and enhance our competitive position to secure new business."

The jobs lost are largely at five sites over three years, including Warton and Samlesbury in northwest England, where the Eurofighter Typhoon is assembled.

However the company said that it expects an order from Qatar, which in late September signalled its intention to buy 24 Typhoons, in a deal that BAE has now revealed also includes six of its Hawk trainer planes.

With the addition of the Qatari order to the backlog, BAE will be able to maintain its Warton final assembly activities for the trainer until at least 2021, according to specialist aviation website FlightGlobal.

BAE is also making 12 Typhoon jets for Gulf state Oman. While the UK defence firm said a follow-on deal with existing Typhoon operator Saudi Arabia is still likely, the deal has stalled.

Speaking to Bloomberg, UBS analyst Celine Fornaro has said it is not clear what impact the Qatari deal might have on the anticipated contract from Saudi Arabia, which is leading a blockade against its tiny neighbour over its independent foreign policy.

The oil-rich Gulf nations are among BAE's most prominent customers.

The controversial arms dealer has been strongly criticised for selling weapons to Saudi Arabia over the high civilian death toll its military intervention in Yemen has caused, as well as concerns over human rights in the absolute kingdom currently witnessing a violent crackdown in its Shia-majority provinces.

With input from AP