* MH370, yachtsmen searches show gap in UK capabilities
* Airbus, Boeing offer cheaper options than scrapped Nimrod
* UK tender could come after H2 2015 spending review
By Sarah Young and Andrea Shalal
FARNBOROUGH, England, July 17 Two high-profile
sea searches have exposed a shortfall in Britain's maritime
patrol capabilities, raising hopes at rival planemakers Airbus
and Boeing that they could soon be fighting over
a multi-billion dollar contract.
The search for Malaysia Airlines Flight MH370,
missing since March, and the hunt for four British yachtsmen
lost in the Atlantic Ocean in May, has brought home to the
British government the need to invest in maritime patrol
aircraft, sources close to the matter say.
Since scrapping its former programme - the delayed and
over-budget BAE Systems Nimrod MRA4 - as part of its
defence review in 2010, experts say Britain has struggled to
carry out aerial hunts for submarines as well as objects on the
surface of its waters.
Adding further urgency is that a new aircraft carrier will
be received by the Royal Navy in 2017; the vessel is part of a
6.2 billion pound ($10.6 billion) project which Britain will
want to adequately protect.
The two planemakers, which regularly battle over commercial
orders, are now sparring over the maritime patrol market, in the
expectation Britain will want to adapt existing planes to its
needs, rather than opt for another complex project like Nimrod.
"It's less about the aircraft and more about what's in it,"
said Glynn Bellamy, partner and UK head of Aerospace and Defence
at KPMG, explaining that unlike the specifically-designed
Nimrod, a future project could use a cheaper aircraft but with
high-tech kit onboard.
Both Boeing and Airbus say their options could suit
Boeing brought its P-8A aircraft, based on the company's
popular 737 commercial aircraft, to the Royal International Air
Tattoo military air show last week and the Farnborough air show
this week to show off what it describes as the plane's superior
maritime surveillance and other capabilities.
Airbus is proposing an option around its C-295 military
aircraft which it said could be configured to meet Britain's
demands using UK suppliers for critical content, a factor it
hopes will curry favour with a government which has stressed the
importance of its domestic defence industry.
"We in Airbus Group want to be at the heart of providing
options because obviously something like this, you'd want the UK
industry to be as involved as possible," Airbus Group UK chief
executive Robin Southwell said, adding the scale of the military
patrol aircraft opportunity could run into billions of pounds.
"It's a big number," he said. "Acquiring, putting it in
service ... then through life supportability and upgradability."
Airbus, which has provided a similar aircraft to Chile, said
its option would be lower in cost compared with Boeing's P-8.
After it cancelled the Nimrod programme, Britain assigned 30
UK air crew to maritime surveillance teams in the United States,
Australia, Canada and New Zealand to ensure they kept their
skills up-to-date, UK Master Aircrew Dave Miles told Reuters.
Miles, who is based at a naval air station in Maryland and
is on loan with the U.S. Navy, is helping to lead testing of the
P-8A aircraft and its software and hardware.
He said opting for a wholly new design, like another
Nimrod-style project, instead of a proven one carried more risk
that costs could spiral out of control.
Britain will undertake a new defence spending review in the
second half of next year, when it could fire the starting gun
for a maritime patrol aircraft competition.
"We continue to assess future requirements ahead of a
decision in the next Strategic Defence and Security Review in
2015 and are considering a number of potential capability
solutions," a spokeswoman for the Military of Defence said.
Industry sources suggest Britain's maritime patrol demands
are unlikely to be straightforward. Maritime surveillance,
search and rescue and submarine warfare capabilities could all
form part of any tender, Southwell said.
"You link maritime patrol aircraft capability with
Intelligence, Surveillance, Target Acquisition and
Reconnaissance (ISTAR) capability so your maritime patrol
aircraft can actually do far more," added independent defence
analyst Howard Wheeldon.
Defence companies were buoyed by a UK government
announcement on Monday that it would invest 800 million pounds
in ISTAR, among other things, a shot in the arm following
defence spending cuts of 8 percent over the last four years.
Other aircraft on offer with maritime patrol capabilities
include a maritime surveillance offering from Boeing which uses
a Bombardier Challenger 605 jet, or a version based on
Lockheed Martin Corp's C-130 plane.
Victor Chavez, the chief executive of Thales Group's
UK business, which provided the search radar on the
old Nimrod, said the aircraft currently on the table could be a
bridge to future surveillance by drones.
"In the medium to longer term, it could be probably be done
by unmanned air systems," he said.
($1 = 0.5835 British Pounds)
(Additional reporting by Kylie MacLellan and Victoria Bryan;
Editing by Mark Potter)