Europe signs air traffic deals worth 1.9 bln euros

BRUSSELS, June 12 (Reuters) - Europe launched a long-term programme on Friday to upgrade its increasingly stressed air traffic control system by signing initial contracts worth 1.9 billion euros ($2.7 billion).

The deals were signed by 16 firms, institutes or airports and the SESAR partnership between the European Commission and the Eurocontrol air traffic organisation, to seek to prevent congestion of the European sky.

The companies include Spanish technology firm Indra (IDR.MC), European aircraft maker Airbus (EAD.PA)[ARBU.UL], U.S. diversified manufacturer Honeywell (HON.N) and French defence electronics group Thales (TCFP.PA).

"In the context of a global recession, the financing and timely development of SESAR has become literally vital," EU Transport Commissioner Antonio Tajani said in a statement.

The aim of the programme, worth 2.1 billion euros, is to unify Europe's often-fragmented air management system and increase by three times its ability to handle air traffic by 2020.

The scheme should also improve air safety by a factor of 10, the Commission said, and reduce air fuel consumption by 10 percent.

"Unless these efforts deliver their results on time, the European ATM (air traffic management) system will be unable to face the projected growth of air traffic," the Commission said. (Reporting by Marcin Grajewski; Editing by Dale Hudson)