Airbus to build helicopters in Saudi Arabia

Airbus Helicopters

• Aviation giant signs $6.7bn deal
• Factory will create 8,500 jobs
• Saudi Arabia’s military spent $75bn last year

Saudi Arabia has signed a $6.7 billion deal with European aviation giant Airbus to manufacture civilian and military helicopters in the kingdom.

In its latest step to develop a homegrown defence industry, state-owned military contractor Scopa and Airbus will build a Saudi factory to make the aircraft, Reuters and Bloomberg reported, citing a television interview with Scopa’s chief executive Fawaz Alakeel.

Saudi’s military budget is the world’s fifth largest. The country spent $75 billion last year, less than only the United States, China, Russia and India, according to the Stockholm International Peace Research Institute (Sipri).

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Yet just 2 percent of the country’s defence spending was domestic as of 2016, according to Saudi’s Vision 2030 economic diversification plan that aims to localise 50 percent of military expenditure by the end of this decade.

The Scopa-Airbus factory will manufacture more than 100 helicopters by 2030 and create 8,500 jobs, Alakeel said. He predicted the first helicopters would roll off the production line within two years of construction of the plant starting next February.

Alakeel said the deal would lead to SAR25 billion ($6.7 billion) of investments over two decades.

He was speaking on the sidelines of a Saudi-French investment forum in France. Companies from the two countries have signed 24 agreements at the event, Reuters reported, citing Saudi state TV.

Saudi Arabia’s Crown Prince Mohammed bin Salman met with French president Emmanuel Macron last Friday.

Saudi military spending equated to 7.4 percent of its GDP last year, the second highest globally after Ukraine, Sipri estimates.