Boeing signs defense, commercial deals with Saudi Arabia

DUBAI (Reuters) - Boeing Co has signed several defense and commercial deals with Saudi Arabia including for the sale of military and passenger aircraft, the company said on Sunday during a visit by U.S. President Donald Trump to the kingdom.

FILE PHOTO: Boeing's logo is seen during Japan Aerospace 2016 air show in Tokyo, Japan, October 12, 2016. REUTERS/Kim Kyung-Hoon

Boeing said Saudi Arabia agreed to buy Chinook helicopters, associated support services and guided weapons systems, and intends to purchase P-8 surveillance aircraft.

The U.S State Department in December announced plans to sell Saudi Arabia CH-47F Chinook cargo helicopters and related equipment, training and support worth $3.51 billion. Congress was informed last year that a sale to Saudi Arabia would involve 48 of the helicopters.

Saudi Arabia is seeking closer defense and commercial ties with the United States under Trump, as it seeks to develop its economy beyond oil and leads a coalition that is fighting a war in Yemen. Saudi Arabia is seeking to end Iran-allied Houthi control over most of Yemen’s main population centers and restore its internationally recognized government to power.

The total value of the deals was not disclosed in a statement announcing the agreements.

The Boeing announcement is the latest in business deals worth tens of billions of dollars signed between U.S. and Saudi companies since Trump arrived in Riyadh on Saturday.

“These announcements reaffirm our commitment to the economic growth, prosperity and national security of both Saudi Arabia and the United States, helping to create or sustain thousands of jobs in our two countries,” said Boeing Chief Executive Officer Dennis Muilenburg.

Boeing also said it would negotiate the sale of up to 16 widebody airplanes to Saudi Gulf Airlines, which is based in the country’s east in Dammam.

A sale to the privately owned commercial airline is expected to include Boeing 777 and or 787 aircraft, according to a person familiar with the matter. Saudi Gulf, which started operations last year, could not be reached immediately for comment.

Boeing also will establish a joint venture with Saudi Arabia to provide “sustainment services for a wide range of military platforms,” the statement said, including non-Boeing supplied equipment. A separate joint venture would “provide support for both military and commercial helicopters.”

The Saudi Rotorcraft Support Center recently received its commercial certificate and is expected to start operations in the near future. The center is a joint venture with Alsalam Aerospace Industries, Saudi Aerospace Engineering Industries and Boeing.

Reporting by Alexander Cornwell Editing by Gary McWilliams and Jeffrey Benkoe