Image copyright JANEK SKARZYNSKI Image caption Poland had been testing the Caracal helicopter with a view to replacing its Soviet-era equipment

The head of Airbus has criticised Poland for cancelling a planned $3.5bn military helicopter contract.

The Polish government abandoned plans to buy 50 French-designed Caracal helicopters last week.

It spurred a diplomatic row, with French President Francois Hollande calling off a visit to Warsaw and threatening to review other defence cooperation.

Now Airbus chief executive Tom Enders has attacked the decision.

He said the company had been "misled for months" and would be seeking compensation.

The European aerospace giant won a tender to supply the Polish armed forces with helicopters in April 2015.

The two sides began to negotiate the detail of a so-called offset contract, under which Poland would buy 50 helicopters, and in return, Airbus would set up manufacturing facilities in Poland.

Soured relations

Such deals, in which a contractor provides incentives to a country buying its products, are relatively common in the aerospace and defence industries.

However, relations have soured since the election of a right-wing government under Beata Szydlo in October last year.

Last week, Poland called off talks, claiming that the proposed contract was not in the country's economic and security interests.

The reaction from France, where Airbus Helicopters has its headquarters, and where the Caracal has been designed and developed, was swift. President Hollande had been due to visit Warsaw for talks this week, but his visit has been cancelled.

Satisfactory offer

A separate visit by the French defence minister, Jean-Yves Le Drian, was also called off.

Poland blamed Airbus for the breakdown in negotiations, suggesting it failed to offer adequate incentives in exchange for the contract.

Defence minister Antoni Macierewicz told reporters at the time: "Airbus Helicopters did not make a satisfactory offer in the last phase of talks. They didn't respond to the Polish position and this is why negotiations on the contract stopped."

However, in an open letter to the Polish prime minister published on Tuesday, Airbus rejected that claim.

The company insists that its investment offer "would have generated more value in Poland than the revenues that would have been generated for Airbus Helicopters through the helicopter supply contract".

'Slammed the door'

It says it offered to build a full assembly line in the city of Lodz, mirroring the capabilities of its existing plant at Marignane, in southern France. The facility would have been 90% owned by the Polish government. There would also have been a parts factory.

Airbus believes the project would have led to the creation of 3,800 jobs.

According to Mr Enders, Airbus "wanted to invest in Poland big time", but the Polish government had "slammed the door on us".

"We have an impression that we have been misled for months by the current Polish government," he said.

"We spent a huge amount of efforts and money in recent years trusting that we were in a fair and professionally-conducted competition. We will of course seek remedies." </s> "Poland considers the negotiations regarding the offset agreement with Airbus Helicopters related to the contract for the purchase of Caracal multi-role helicopters for the Polish army as finished," the ministry said.

Poland's previous centrist government, beaten by the eurosceptic 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 in the United States and AgustaWestland in Italy.

Earlier this year local media reported that Poland scrapped the deal, but Airbus said talks were continuing.

"For the Polish government the top priority is to ensure the security of the state and the conditions for the development of the Polish defence industry. Discrepancies in the negotiating positions of both sides make it impossible to reach a compromise, and therefore the continuation of talks is pointless," the ministry also said. ($1 = 3.8488 zlotys) (Reporting by Pawel Sobczak Writing by Agnieszka Barteczko; Editing by Ruth Pitchford) </s> Poland's Development Ministry said late on Tuesday that the negotiating position of the two sides on the purchase of 50 Caracal helicopters for 13.5 billion zlotys (3.14 billion euros) was "so different that further talks are pointless."

The collapse of talks also shelves a major offset deal agreed under the previous Polish government.

The ministry said that offers made by Airbus Helicopters had "failed to properly secure Poland's economic and security interests." Polish officials had earlier indicated that the value of the deal should match the value of the purchase.

Offset agreements - where the seller of a product or service agrees to invest in sectors or goods on the buyer's side to compensate or enhance the value of the deal - are common in the military industry.

The decision to buy the helicopters from Airbus was made by the previous government, led by the center-right, pro-European party Civic Platform, as part of plans to modernize the military over the next 10 years, spending about 35 billion euros, and was triggered by regional tensions over Russia's annexation of Crimea from Ukraine.

Watch video 26:01 Share Witold Waszczykowski on Conflict Zone Send Facebook google+ Whatsapp Tumblr linkedin stumble Digg reddit Newsvine Permalink https://p.dw.com/p/1IUrd Witold Waszczykowski on Conflict Zone

The conservative Law and Justice (PiS) government had indicated it might cancel the deal after it won elections last year. Local media reported that Warsaw had actually scrapped the deal earlier this year, although Airbus said talks were continuing.

The original deal was criticized by trade unions in two Polish aviation plants linked to firms that were not chosen in the initial tender: one linked to the US producer of the Black Hawk, the other to a British-Italian consortium AgustaWestland, now called Leonardo Helicopters, which makes the AW149 helicopter.

A system by the Eurosam consortium - including MBDA France, MBDA Italy and France's Thales Group - was also in the running alongside US company Raytheon's Patriot system for the deal.

The Defense Ministry had wanted to buy eight missile batteries by 2025, with two to be delivered within three years of signing the contract. Poland had originally said it would buy 70 helicopters but reduced this to 50.

Poland's parliamentary committee of national defense in January approved a defense budget for 2016 of PLN35.9 billion (euro xxx), a rise of 9.4% over 2015, with the country increasing its annual budget by PLN2.9 billion as it commits to spending 2 percent of gross domestic product (GDP) on defense - NATO's guideline amount.

jbh/msh (AP, AFP, Reuters) </s> MOSCOW – The creation of a helicopter repair and maintenance center in Venezuela is expected to be completed this year, Igor Chechikov, deputy director of Vertolyoty Rossii (Russian Helicopters), which is part of the state-owned Rostec Corporation.

Previously the opening of the maintenance center was planned for the end of 2018. Over the past ten years, Russia has supplied more than 50 Mi model helicopters to Venezuela.

“At this time almost all the necessary equipment has already arrived in the country, the maintenance technicians are already there, the installation and calibration activities are in progress,” Chechikov said.

According to the deputy director, this is a contract in force for some years now. “Venezuela is interested in continuing the project, and we are interested in fulfilling our commitments and we are going to carry them out,” Chechikov said.

Venezuela is the largest importer of Russian armaments in Latin America. Most of the contracts had been signed and implemented before the onset of political instability in the country.

The various military contracts made with this country amounted to billions of dollars. T-72 tanks, BTR-80 armored vehicles, Pechora missile launch systems, S-300, among others were supplied.

Last Wednesday, Igor Chechikov announced the opening of a Mi-35M helicopter repair and maintenance service center in Brazil, in the city of Belo Horizonte.

Meanwhile the opening ceremony of the helicopter training center, created with the participation of Russian and Venezuelan experts, was held on Friday.

“A modern helicopter training center was built under Rosoboronexport JSC’s contract (part of Rostec State Corporation) with the Venezuelan military-owned company CAVIM,” said Russian state arms exporter’s press service, Rosoboronexport.

A team of Venezuelan experts was trained in Russia according to the rules of operation of Russian simulators (on mobile and stationary ground).

According to the statement, the capabilities of this center allow Venezuelan pilots to undergo comprehensive training in piloting the Mi-17V-5, Mi-35M and Mi-26T helicopters in close proximity to reality.

Rosoboronexport reiterated that Russia remains committed to expanding the cooperation of the defense industry with Venezuela, paying particular attention to the training of experts as well as to the timely maintenance of the equipment provided.

Russian arms deliveries “have provided Venezuela with a strong potential that guarantees the country’s security and defense capabilities,” Rosoboronexport said. </s> related media assets (image or videos) available. Click to see the gallery.

2 related media assets (image or videos) available. Click to see the gallery.

A unit of Russian conglomerate Rostec said on Tuesday it was ready for an out-of-court settlement with Boeing over its order for 35 Boeing 737 MAX jets, a spokesman for Rostec's subsidiary Avia Capital Service told Reuters.

MOSCOW: A unit of Russian conglomerate Rostec said on Tuesday it was ready for an out-of-court settlement with Boeing over its order for 35 Boeing 737 MAX jets, a spokesman for Rostec's subsidiary Avia Capital Service told Reuters.

Boeing MAX 737 jets have been grounded worldwide and airlines are cancelling multimillion contracts following crashes in October and March that killed 346 people.

Earlier on Tuesday, Rostec said its unit had filed a lawsuit in the United States to cancel its order for the 35 MAX jets. The Financial Times, which first reported the move, said Avia Capital Service gave Boeing a cash deposit of US$35 million.

A spokesman for Avia Capital Service told Reuters that delivery of the jets was first scheduled for October 2019 but was moved to March 2022. The Rostec unit had paid Boeing a deposit and was suffering losses from non-delivery, he said.

"If Boeing executives show a good will, we are ready to hold talks and find a mutually-beneficial out-of-court settlement for compensation of the losses we have suffered," he said.

He added that the jets were ordered for a number of Russian air companies, including domestic low-cost firm Pobeda, a unit of the state carrier Aeroflot .

Russia is mainly using Boeing and Airbus jets for passenger flights, with a number of domestic airlines also adding Russian-made regional Sukhoi Superjet aircraft to their fleets.

The Rostec subsidiary now wants the deposit to be returned by Boeing with interest, along with US$75 million in "lost profit" and about US$115 million in compensatory damages, plus "several times the amount" in punitive damages, the FT said.

Rostec declined to provide further details about the lawsuit. </s> Poland's parliament speaker resigns over use of govt flights

WARSAW, Poland (AP) — The speaker of the Polish parliament says he is resigning after a scandal erupted over his and his family's private use of a government plane.

The affair was threatening to damage the reputation of the right-wing ruling party, Law and Justice, ahead of parliamentary elections in October.

Polish politics have for days been consumed by an affair dubbed "Air Kuchcinski" after the media and political opponents revealed that the speaker frequently flew by government jet from Warsaw to his home city of Rzeszow, some 280 kilometers (175 miles) to the south.

Kaczynski has since tightened rules about the official use of government flights. </s> By The Associated Press

MOSCOW (AP) — An executive at a Russian state-owned company says it will finish building a facility for repair and maintenance of Russian helicopters in Venezuela by the end of the year. Igor Chechikov, deputy…

MOSCOW (AP) — An executive at a Russian state-owned company says it will finish building a facility for repair and maintenance of Russian helicopters in Venezuela by the end of the year.

Igor Chechikov, deputy chief executive at Russian Helicopters, told Russian news agencies on Tuesday that all the necessary equipment has been delivered to Venezuela and that the construction should be completed this year.

Russia has been a major backer of embattled Venezuelan President Nicolas Maduro, supplying his government with weapons and providing loans.

Russia last week inaugurated a training center for Venezuelan pilots who fly Russian aircraft.

Copyright © 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed. </s> BERLIN: Airbus said Wednesday it had won a major order from China of 140 planes for $22.8 billion, during a visit by President Xi Jinping to Berlin.The European aircraft maker said it had sealed the agreement with China Aviation Supplies Holding Company (CAS), which chief executive Tom Enders called "one of the biggest contracts signed in a long time by Airbus".The deal covers 100 A320 single-aisle jets and 40 A350 wide-body aircraft."This underscores the strong demand by Chinese airlines in all segments, from domestic and low-cost to the regional and international long-haul market," Airbus said in a statement.The company said a market analysis forecast a doubling of demand worldwide for planes with more than 100 seats to 40,000 aircraft in the next 20 years, fuelled largely by demand from developing markets such as China."In the mid-1990s we had a market share (in China) of five to six percent," Enders said."Twenty years later we have around 50 percent -- we really put our foot on the gas."Airbus said its A320 line of planes was the world's best-selling single-aisle aircraft with more than 13,000 orders and 7,600 planes delivered.In January last year, BOC Aviation , owned by Bank of China, announced an order for 30 Airbus A320s worth more than $3 billion to meet growing demand.At last month's Paris Air Show , Airbus announced 326 orders worth nearly $40 billion.However, it was outpaced at the event, one of the biggest annual sales bazaars in the industry, by Boeing thanks to its new 737 MAX 10 airliner, taking in a total of 571 orders for nearly $75 billion.Xi was in Berlin for talks with Chancellor Angela Merkel ahead of the G20 summit of big industrialised and emerging economies in the northern German port city of Hamburg starting Friday. </s> Russia has opened a centre to train military helicopter pilots in Venezuela in a further sign of Vladimir Putin’s support for Nicolas Maduro’s regime.

It comes days after Moscow sent two planes of military personnel and equipment to Venezuela.

Elliott Abrams, the U.S. envoy, said the U.S. believed the teams had been flown in to repair Soviet-era S300 missile systems, which were knocked out by a series of blackouts.

But he added that the U.S. was watching closely to see what the Russians did, adding: “We have options, and it would be a mistake for the Russians to think they have a free hand.”

Rosoboronexport, the state corporation for arms sales, stated it had built the centre under a contract with Venezuelan state-owned firearms manufacturer CAVIM.

Russian-made simulators will let local pilots practise flying helicopters that Moscow has supplied to Caracas.

 These include the Mil Mi-35M Hind, a gunship, the Mi-26T heavy transport helicopter and the Mi-17V-5, a transport helicopter that can be equipped with machine guns and rockets.

The centre, with Russian-trained staff, will cut the costs and time needed to train pilots, Rosoboronexport said.

 Russian organisations “remain committed to deepening cooperation with government agencies of Venezuela”, the statement said. Russian-made helicopters in Venezuela are participating in “routine military activities and operations against smugglers”, as well as delivery of humanitarian aid, it added, making no mention of clashes between security forces and protesters.

Rosoboronexport did not immediately reply to requests for comment.

At the opening ceremony for the helicopter centre on Friday, Vladimir Padrino Lopez, the Venezuelan defence minister, said a flight simulator for the Russian-made Su-30MK2 fighter jet would be installed in another city and a factory to produce Kalashnikov assault rifles under licence would open soon after years of delays.

More than 50 countries have recognized Juan Guaido, the opposition leader, as interim president after weeks of protests and shortages of food, water, medicine and electricity.
• Five American mercenaries were arrested in Haiti. Were they there to help the president hide Venezuelan oil money?
• Venezuelans search for water as new blackouts hit nationwide
• Russia sends military planes and advisors into Venezuela, showing off combat strength

Maduro is struggling to contain unrest in the country amid blackouts that began on March 7 and have led to subsequent failures in water systems.

In March, 99 Russian soldiers and 35 tons of equipment flew in to bolster Maduro’s military.

John Bolton, the U.S. national security adviser described it as a “direct threat to international peace and security”. Donald Trump has said he will “probably” speak to Putin and Xi Jinping, the Chinese president.

Yesterday, Alejandro Chacon, a Colombian congressman, said he received a letter from Russia’s ambassador in Bogota, warning Colombia against any military action against Maduro.
Poland's Development Ministry cancels the April 2015 tender contract for the purchase of 50 Caracal helicopters from Airbus Helicopters, worth US$ 3.5 billion.