11 April 2006

Under this new alliance, the three firms will provide an avionics support service to the primes for MoD rotary and fixed wing aircraft. The alliance will use its extensive domain expertise and established supply chain partnering networks, to drive down costs and improve equipment availability. Thales UK, Smiths and SELEX S&AS have developed long-term, end-to-end business models, which with contract incentives will ensure sustainable improvements. In addition by working together, the three companies will maximise synergies and efficiencies through a shared support infrastructure, rationalised processes and co-operative working throughout the supply chain.

The TSS offering will support the prime aircraft manufacturers by providing integrated through-life support services for avionics and electrical systems. Thales, Smiths and SELEX S&AS developed the thinking behind TSS and forged successful working relationships on programmes such as Sea King and Tornado. It was the achievements on these programmes that convinced the team that TSS was the way forward for current and future platforms.

The transformation from traditional support methodology to support services such as those under the TSS programme will provide the UK taxpayer with significant cost savings by ensuring that the partner organisations work collaboratively and efficiently to maximise value for the MoD.

Total Support Services (TSS) is a set of tailored services providing:

• Onshore industrial capabilities for through-life support and upgrade of critical avionics and electrical systems;

• End-to-end affordable business models: Long-term partnering networks, with incentives to drive down costs and improve performance;

• Maximum exploitation of technology insertion to meet emerging threats;

• A coherent response to the challenge of availability based contracting for avionics and electrical systems.

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About SELEX Sensors and Airborne Systems (S&AS):

SELEX S&AS, a Finmeccanica company, is one of Europe's leading defence electronics companies which is 75% owned by Finmeccanica and 25% owned by BAE Systems and brings together the former UK based BAE Systems Avionics and Galileo Avionica in Italy. SELEX S&AS provides world class capabilities in surveillance, protection, tracking, targeting, avionics and imaging systems. The company employs some 7,600 employees and has operations in England, Scotland, Italy, and the United States. www.selex-sas.com

About Thales UK:

Thales UK's activities encompass defence, aerospace, security and services. Thales employs 10,000 people in the UK and 60,000 people throughout the world. In 2004, Thales UK's revenues were £1.1bn. www.thalesgroup.co.uk

About Smiths: Smiths Aerospace, a part of Smiths Group, is a leading transatlantic aerospace systems and equipment company, with more than 11,000 employees and $2.2 billion revenues globally. The company holds key positions in the supply chains of all major military and civil aircraft and engine manufacturers and is a world-leader in digital, electrical power, mechanical systems, engine components and Systems Customer Services. www.geaviationsystems.com

Notes to editors:

TSS has been established to keep pace with the changing military support market, which has accelerated dramatically in recent years as the UK MoD increasingly seeks a transfer of support responsibility to industry. The result of this effort will be that the MoD receives a first class service and, above all, the aircraft keep flying reliably, enabling the MoD to concentrate on key operational objectives.

TSS offers a genuine partnering approach by embedding industry personnel within the MoD Integrated Project Teams and at operating bases. By paying close attention to how they work together, they can minimise duplication and speed up the processes by shortening the i