Eurocopter CEO sees German defence deal within months

MUNICH Wed Feb 6, 2013 1:22pm EST

MUNICH (Reuters) - Eurocopter, a unit of Europe's largest aerospace and defence company EADS EAD.PA, aims to reach a multi-billion dollar agreement with the German government in a few months on a downsized order for helicopters, its chief executive said.

Shrinking German defence orders have been a source of tension between EADS and the Berlin government, which recently blocked EADS efforts to merge with BAE Systems (BAES.L).

Germany is taking a 12 percent stake in EADS in a shareholder restructuring designed to cap state influence. But industry analysts say part of the influence wielded by Germany and France over the Airbus parent group will continue to be driven in part by the scale of their defence orders.

"Talks are really very constructive," Eurocopter CEO Lutz Bertling told Reuters in an interview this week.

"We realize that structures change, and we have to adapt to that. The government is a very strategic customer with whom we want to continue doing business in the coming decades," he said.

Germany wants to cut major defence orders as part of sweeping reforms of the military. The army, for example, wants 40 instead of 80 of Eurocopter's Tiger military helicopters and 80 instead of 122 of the NH-90 transport helicopter.

A Eurocopter spokesman said he could not provide details on the negotiations. According to the German defence ministry, German Defence Minister Thomas de Maiziere last met with EADS CEO Tom Enders and Bertling in mid-January.

In September, Bertling said he aimed to reach a deal within two or three months.

Eurocopter, which is also the world's No. 1 civil helicopter maker, expects its overall deliveries to increase by 15 percent this year from 475 in 2012 thanks partly to demand from the oil and gas sector.

"In the energy sector we have grown more than 10 percent in each of the last two years," Bertling said.

The oil and gas sector, which has been expanding rapidly in recent years, has made major discoveries in areas that are hard to reach by land, making companies that provide helicopter transport among Eurocopter's best customers.

Bertling said he expects that growth in the sector will accelerate further as countries such as Malaysia, Vietnam, Kazakhstan and Indonesia develop oil and gas finds.

Plans for wind farms further and further off the coasts of countries including Germany and Britain will also boost business, he said.

Eurocopter revenues rose 15 percent to 6.3 billion euros ($8.52 billion) in 2012. The company makes about half its revenue from helicopter sales, while most of the rest is from services such as engine maintenance and training.

($1 = 0.7392 euros)

(Additional reporting by Tim Hepher in Paris; Writing by Maria Sheahan; Editing by Louise Ireland)

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