Finmeccanica’s AgustaWestland on Jan. 29 received two contracts totaling about $1.2 billion from the U.K. Ministry of Defense to upgrade AH-64 Apache and Merlin helicopters, while supporting the economy. 

A five-year, $712 million contract will provide maintenance and support for the British Army’s AH-MK1 Apache attack helicopter from April 1 through March 31, 2019. The helicopter  is currently used on operations in Afghanistan.

“The Apache IOS contract will deliver further efficiencies over the next five years, demonstrating our commitment to service excellence while delivering the aircraft availability and capability the Army Air Corps require,” AgustaWestland CEO Daniele Romiti said in a Jan. 29 statement.

This is the second contract Apache IOS contractor AgustaWestland will continue to be supported by partners 

Boeing [BA], Lockheed Martin [LMT], Longbow International (a joint venture formed by Lockheed Martin and Northrop Grumman [NOC] and Finmeccanica’s Selex ES unit.)

The IOS contract is expected to deliver required levels of aircraft availability while reducing through-life costs. The output-based contract provides incentives for AgustaWestland to improve operational output and reducing costs.

The U.K. Apache AH-Mk1 fleet is closing in on the 150,000 flying hour milestone and recently more than 40 percent of annual flying hours have been performed on operations in Afghanistan, protecting United Kingdom and allied forces. 

The second $546 million contract is to upgrade the Royal Air Force’s Merlin Mk3/3a helicopters for use by the Royal Navy’s Commando Helicopter Force.

This work starts immediately on Merlin Life Sustainment Program (MLSP) design and manufacturing with seven interim Phase 1 aircraft delivered to the Royal Navy in 2015 and 2016. All 25 Phase 2 standard aircraft will be delivered between 2017 and 2020.

The seven Phase 1 aircraft will provide the Royal Navy with an interim capability between the withdrawal of the Sea King Mk.4 in early 2016 and the Initial Operating Capability (IOC) of the full MLSP configured aircraft in mid-2018. The seven aircraft will feature changes for maritime operations including the addition of lashing points, a powered folding main rotor head, undercarriage modifications and additional communications equipment, the company said.

As part of the program, 25 Royal Air Force AW101 Merlin Mk3 and Mk3A helicopters are being transferred to the Royal Navy to replace their fleet of Sea King Mk4 helicopters. The aircraft will undergo conversion at AgustaWestland’s U.K. Yeovil facility and will be based at the nearby Royal Naval Air Station Yeovilton.

The 25 Phase 2 aircraft will be fully optimized for ship operations and include automatic main rotor blade folding and tail fold, the company said. The aircraft will also be fitted with the same cockpit as the Royal Navy’s Merlin Mk2 aircraft, giving the Merlin fleet a common cockpit featuring five 10” x 8” integrated display units, two touch screen units for controlling the aircraft’s systems and mission equipment, as well as two cursor control devices for cursor control of the tactical displays.

The Merlin Mk4 and Mk4A aircraft will continue to be supported through the existing Integrated Merlin Operational Support (IMOS) contract, which has been in place since 2006 with AgustaWestland as prime contractor.

Under the design and manufacturing contract, AgustaWestland will also manage a competition to deliver a synthetic whole crew training equipment and infrastructure for the Merlin Mk4/Mk4A,

The MoD expects the work to sustain more than 1,000 U.K. engineering and manufacturing jobs.

Work on the contracts also will protect jobs at GE Aviation [GE], General Dynamics [GD], Selex ES and APPH Aviation Services, AgustaWestland said.

During a visit to AgustaWestland’s Yeovil factory, Defense Secretary Philip Hammond said: “The U.K. defense industry makes an important contribution to the economy, generating revenue of over ($36.4 billion) each year, and its highly skilled workforce plays a crucial part in growing our economy.”

Hammond also said the work helps safeguard the army’s attack helicopter capability and provide the Royal Navy and Royal Marines with an upgraded, modern Commando Helicopter Force.