Canada Set to Pick Airbus Over Leonardo for Rescue Planes

  • Firms had earlier emerged as final frontrunners over Embraer
  • Order estimated by previous government at C$3.4 billion

Airbus Group SE has been selected by the Canadian government to replace its search-and-rescue planes, beating out Leonardo-Finmeccanica SpA in a deal valued by the previous government at C$3.4 billion ($2.6 billion), according to people familiar with the situation.

The deal to replace and maintain Canada’s 19 search-and-rescue planes is set to be announced Thursday, said the people, who spoke on condition of anonymity because the details aren’t public. The selection of Airbus’s C295 was first reported by the Ottawa Citizen newspaper. The final value of the contract and number of planes isn’t yet clear.

Canada’s government later announced a press conference will be held Thursday at an air force base in Trenton, Ontario with Defence Minister Harjit Sajjan and Public Services and Procurement Minister Judy Foote. The ministers will “make an announcement on the project to replace” its rescue planes.

A spokesman for the Airbus-led bid referred questions Tuesday to government, while a spokesman for the Leonardo-led bid declined to comment.

Jordan Owens, a spokeswoman for Sajjan, and Annie Trepanier, a spokeswoman for Foote, wouldn’t confirm or deny that Airbus had been selected. “We look forward to giving our women and men in uniform the tools they need to continue to deliver effective search and rescue operations‎,” Owens said late Tuesday by e-mail.

Embraer SA also bid for the contract, but the race was said to have narrowed to Airbus’s C295 and the C-27J Spartan, produced by a Leonardo-led consortium, because Canada’s government didn’t amend its procurement process to accommodate Embraer’s production schedule. Embraer spokeswoman Alyssa Ten Eyck declined to comment Wednesday.

Airbus has teamed up with closely held Provincial Aerospace Ltd. of St. John’s, Newfoundland, as well as Pratt & Whitney Canada -- the engine-making unit of United Technologies Corp. -- and Montreal-based flight simulator maker CAE Inc.

The “Team Spartan” consortium includes Leonardo-Finmeccanica, General Dynamics Corp.’s Canadian division and other companies behind the Spartan.

Canada’s current fleet includes six CC-115 Buffalo aircraft, acquired in 1967, and 13 CC-130H Hercules, acquired between 1960 and 1997, according to a statement on the procurement department website. The planes will be phased out of service as new ones are delivered.

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