Beleaguered arms company Denel received a much-needed income boost yesterday when it won a R210m tender from European aerospace firm BAE Systems.

The export order for high-technology pilot helmet tracking systems, to be installed on North Atlantic Treaty Organisation's new Eurofighter-Typhoon jet fighter, could set Denel on a major recovery path following years of unsuccessful attempts to enter the lucrative US and UK arms markets.

BAE Systems has ordered 450 head-tracking devices and 450 head storage and drive units. A smaller order of similar equipment has also been placed for the training simulators of the Eurofighter-Typhoon.

The device enables a pilot to direct an aircraft's weapons, reconnaissance and protection systems.

Jonathan Walton, BAE Systems' executive vice-president for the South African market, said the firm was impressed with the design and reliability that Denel had presented as part of its bid.

"Eurofighter-Typhoon pilots will be confident with the integrity and accuracy of the system," he said.

Denel's outgoing CEO, Victor Moche, said the contract was indicative of the high-technological skills available in the South African defence industry.

He said: "This contract is unequivocal proof that SA has the necessary expertise and strategic technologies that the world market needs today.

"It is expertise such as this that should be nurtured and protected to ensure our continued participation and co-operation with players in the global defence markets."

The contract forms part of BAE Systems' and SAAB's obligations following SA's purchase of new Hawk and Gripen aircraft for the South African Air Force.

The two European firms have committed to delivering $8,7bn to the South African economy through investments, exports, skills development and technology transfers.

In September last year BAE Systems awarded Denel a R13m contract to supply aircraft components for the production of Hawk jets for India's air force.

Public Enterprises Minister Alec Erwin said last week that government would continue to seek strategic production alliances for Denel, with particular emphasis on Indian and Brazilian defence industries.

Erwin said existing alliances with European defence companies would also be strengthened.

Denel posted a net loss of R377,5m last year.

With acknowledgements to Khulu Phasiwe and the Business Day.