The UK wants to increase its defense budget to 3% of GDP. Yesterday, October 26, the British Defense Secretary, Ben Wallace, announced the Government’s commitment to increase defense spending up to 3% of gross domestic product by 2030, higher than the 2.5% aspired by its predecessor , Boris Johnson.
UK defense set to double military spending to £100bn
This means doubling military spending to an annual budget of £100bn (€111bn) by the end of the year, up from the current 2.1% of GDP (£48bn). It should be recalled that, based on the data provided by NATO, this year Italy will spend 28.8 billion euros on defence, a figure equal to 1.54% of GDP.
Delays for New Medium Helicopter program to replace Puma helicopters
At the same time, Wallace focused on the needs that could be addressed: ISR (new artillery batteries), SIGINT (Signal Intelligence), electronic warfare (EW) and certainly the capabilities to counter new drones (UAVs). Also yesterday, the UK’s MoD announced that the New Medium Helicopter program to replace the ‘Puma’ helicopters has been delayed and this could impact the out-of-service date of the Puma helicopters. The program provides for the purchase of up to 44 new medium transport helicopters which will replace the aging Puma and Bell 212/412 as well as Dauphin currently in service. Leonardo participates with the AW149, Airbus with the H175M, Lockheed Martin with the Black Hawk.
Leonardo participates in the tender with the AW149
Banca Akros analysts recalled that Leonardo records about 12% of its revenues in the United Kingdom and underlined that “the promise of a huge increase in defense spending will advance amid multiple obstacles due to the difficult economic period in England. However, the news on the UK military budget is clearly positive for Leonardo, while as regards the New Medium Helicopter program worth around 2 billion euro, we report that Leonardo’s AW149 is a competitor and the main candidate. The delay is not a 100% surprise. We confirm the buy rating and the target price at 15 euros”, on the Leonardo stock which rises by 0.63% to 7.93 euros on the stock exchange, thanks to the news that the company has signed a contract with the Arma of the Carabinieri for the supply of 20 single-engine AW119Kx helicopters for its Air Service.
Leonardo signs a contract with the Carabinieri for the supply of helicopters
The helicopters will be assembled at the Vergiate plant (Varese) with deliveries expected between 2023 and 2026. The contract also includes a complete package of turnkey technical logistic support and training services for pilots and maintenance technicians. A supply that will allow the Arma dei Carabinieri to respond to the needs of modernizing the fleet in order to guarantee greater and better safety for citizens, through more effective control of the territory and guiding the intervention of units on land.
Cioffi: social security is one of the key elements of sustainability
For Lucio Valerio Cioffi, general manager of Leonardo, social security is one of the key elements of sustainability. “The belief that the key ESG social and environmental criteria were in partial conflict with defense has been disavowed by recent events. One of the key elements of sustainability is social security”, said Cioffi, speaking at the ESG CEO Forum 2022 , organized by Bain & Company. From this point of view, aerospace-defence must make a strong contribution to sustainability. “Net zero is an ambitious concept that presupposes an entire ecosystem, but it is clear that sustainability born as a travel companion is now a vital element”, he added, specifying that sustainability “is a huge opportunity and there is no one color of government that can interrupt this process”. (All rights reserved)