BAE safeguards 6,000 jobs with £2.5bn Oman military jet deal

BAE Systems has secured a boost for British manufacturing and safeguarded 6,000 jobs after agreeing a £2.5bn contract with Oman for Typhoon and Hawk military aircraft.

Britain's largest defence contractor and manufacturing employer is targeting growth markets such as the Middle East as part of a strategic imperative that has become even more urgent in the wake of the failure to agree a £25bn merger with EADS, the owner of aerospace company Airbus. The contract is for the delivery of 12 Typhoon and eight Hawk training aircraft from 2017 onwards.

David Cameron hailed the deal as he visited Oman on Friday, saying it would maintain 6,000 jobs at BAE sites in Lancashire and Yorkshire. BAE's main aerospace sites are in Warton and Samlesbury near Preston, where the bulk of the work will take place, with the Brough site in Yorkshire building some Hawk components.

"Boosting exports is vital for economic growth and that's why I'm doing all I can to promote British business in the fastest growing markets so they can thrive in the global race," Cameron said. "Every country in the world has a right to self-defence and I'm determined to put Britain's first-class defence industry at the forefront of this market, supporting 300,000 jobs across the country."

The proposed merger with EADS would have sheltered BAE from the consequences of its exposure to the UK and US defence markets, which are shrinking due to public spending cuts and the scaling back of operations in Iraq and Afghanistan. In the wake of the deal's collapse, investors are paying even more attention to BAE's efforts in other markets, which were already the subject of a strategic push before the EADS discussions emerged in the summer.

The deal with Oman, a Gulf state with which BAE already has a decades-long relationship, has been well trailed and there are hopes similar contracts can be sealed with the United Arab Emirates and Qatar. BAE's main Middle East deal, and its bridgehead to the region, was thecontroversial al-Yamamah contract that brought BAE more than £40bn in revenue, but also a Serious Fraud Office investigation that was terminated under the orders of No 10 in 2006.

The kingdom is also an important player in BAE's immediate post-EADS future because shareholders are hoping to receive the proceeds – an estimated £600m – from the renegotiation of a Saudi contract for 72 Typhoons. However, BAE warned this week that 2012 earnings could be hit if an agreement is not reached with Saudi Arabia in the next two months

Aerospace is the mainstay of BAE's UK operations and its 35,000 British employees, accounting for around 55% of British sales.

Meanwhile, another British-based manufacturer received an order boost on Friday when the Department for Transport announced thatBombardier's Derby factory will build 40 new carriages for the London-to-Brighton Southern rail franchise. The DfT added that it will support a request by Southern for a further 116 carriages with the option for an extra 140.

Bombardier, which employs around 1,600 people at Derby, has let 1,000 employees go since it lost out to Germany's Siemens on the £1.4bn Thameslink contract and needs more carriage deals if the site – Britain's oldest train factory – is to stay open. Despite the Southern deal, the £1bn Crossrail contract that will be decided next year is viewed as the key to Derby's future.

Patrick McLoughlin, the transport secretary, said: "Our support for Southern will not only boost capacity but help secure British jobs. The deal for the 40 new carriages, helped along by my department, demonstrates the government's ongoing commitment to invest in Britain's railways."