BAE Systems is to supply 72 Eurofighter Typhoon jets to Saudi Arabia in a deal that will initially be worth about £5 billion. The contract’s value has not officially been revealed but analysts believe it could eventually be worth up to £20 billion.

The fighter contract was announced in Riyadh after being signed by defence ministers, as The Times disclosed on Monday. The contract to supply the Kingdom with Eurofighters is a huge win for BAE, which will build the first tranche of aircraft at its factory in Warton, Lancashire.

Analysts believe the contract could be worth £10 billion to £20 billion over 20 years. The aircraft will cost about £5.2 billion but BAE is expected to sell a further £5 billion of weapons and guidance systems.

The company will also provide the Saudi Arabian air force with long-term maintenance of the jets, which could be worth £10 billion over the coming decades.

Saudi Arabia has asked for the delivery of the Typhoons to be stepped up and the UK Government may assign some of its own allocation of Eurofighters to fulfil the contract.

Eurofighter has been developed by the British, German, Spanish and Italian governments and each country will buy about 150 aircraft. However, export sales have so far been limited to 18 to Austria.

The deal is significant because it represents nearly 15 per cent of all Eurofighters scheduled to be built and will extend work at Warton, where 9,000 people are employed, until 2014.

The UK Ministry of Defence, which negotiated the deal on BAE’s behalf, said: “The required commercial principles have now been agreed, which has initiated the purchase of Typhoon aircraft.”

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