UK Government Extends Leonardo Helicopter Contract by £165 Million

The British government has announced a significant contract extension worth £165 million with the Italian defence company Leonardo. This agreement will enhance the maintenance operations of the Royal Navy’s fleet of 54 Merlin helicopters, signalling the UK’s commitment to bolstering its defence capabilities amid rising military expenditure plans.

Leonardo confirmed that the contract extension would support around 1,000 jobs within the UK. This includes 200 positions at its manufacturing facility in Yeovil, Somerset, and 800 roles across the wider supply chain. Moreover, the agreement is expected to benefit employment at the Royal Navy’s airbase located in Culdrose, Cornwall, reinforcing the importance of jobs tied to national security initiatives.

Merlin helicopters are crucial assets for the Royal Navy, designed primarily as “submarine hunters.” They also play vital roles in intercepting piracy and drug trafficking, providing assistance during maritime emergencies, and transporting personnel and supplies. Maria Eagle, Minister for Defence Procurement and Industry, emphasised that this investment highlights the UK’s determination to maintain advanced defence capabilities while also fostering economic growth.

Built at the Yeovil plant, the only remaining helicopter factory in the UK, the Merlin has also gained a cultural presence, featuring in popular media such as the James Bond film Skyfall. Leonardo operates as the prime contractor for the maintenance of these helicopters, with Lockheed Martin and Serco serving as subcontractors, thus creating a network of partnerships within the defence sector.

Earlier this year, Keir Starmer’s government revealed plans to increase military spending to 2.5% of gross domestic product by 2027, with a longer-term aim to escalate this figure to 3%. The contract extension for the Merlin fleet comes as the Royal Air Force retires its Puma helicopters after decades of service, leaving a significant gap with no immediate replacement announced as yet.

Leonardo is currently the sole contender for a £1 billion contract to manufacture new medium-sized helicopters, proposing the AW149 model, which would also be produced in Yeovil. The government is expected to make a decision soon regarding this key military procurement.