WARSAW French Airbus Group's (AIR.PA) helicopter unit said on Thursday talks with Poland's economy ministry were continuing on the delivery of 50 helicopters for the Polish army, denying a media report that the deal had been scrapped.
Rzeczpospolita daily reported that Poland has decided to scrap the $3 billion helicopter deal and has agreed with the French defense ministry that it will only buy "several" helicopters from Airbus, citing an unnamed source in the Polish defense ministry.
At the same time, Poland has begun negotiations with U.S. rival Lockheed Martin's Sikorsky (LMT.N), manufacturer of the locally-produced Black Hawk helicopters that could be purchased by the Polish army as soon as this year, the daily said.
Scrapping the deal, months before a NATO summit in Warsaw where Poland is expected to seek more allied presence on its territory, could strain Warsaw's ties with France and delay a military program speeded up because of the Ukraine crisis.
"The comments which have come up in media recently induce speculation and gossip, leading to erroneous conclusions regarding the Polish helicopter tenders," Airbus Helicopters said in a statement commenting on Rzeczpospolita's report.
"The only true information is that talks with the Economy Ministry continue and that we are ready to support our Polish partners."
A source at the French defense ministry, who asked to remain anonymous because he was not authorized to speak about the matter, also denied the report, saying that calling into question the tender process was not an option as it would send a negative signal.
Poland's previous centrist government, beaten by the euroskeptic Law and Justice (PiS) party in elections last October, agreed a provisional deal with Airbus for 50 EC-725 Caracal multi-purpose helicopters.
That meant turning down offers from Sikorsky and AgustaWestland SIFI.MI in Italy.
The contract, negotiated by the economy ministry, has yet to be signed and PiS has repeatedly said it would rather see the deal awarded to a producer manufacturing locally. Both Sikorsky and AgustaWestland have facilities in Poland.
As well as boosting Poland's defense industry, buying Sikorsky helicopters could further strengthen Warsaw's ties with Washington, already its closest ally, and could help secure U.S. backing for Poland's demands of more NATO presence on the alliance's eastern flank.
Airbus has proposed a so-called "offset program" that would source work on its helicopters in Poland, but Foreign Minister Witold Waszczykowski has described that as "leftovers" and said those aircraft would mostly be built in France.
Earlier this year, a Polish deputy defense minister said that the deal with Airbus was "very likely" to be scrapped.
(Reporting by Wiktor Szary; additional reporting by Marine Pennetier in Paris; Editing by Tom Heneghan and Elaine Hardcastle)