TAMWORTH has lost out on a lucrative multi-billion dollar defence force flying contract after the tender was awarded to Victoria.

From 2019, Sale, in regional Victoria, will become the new home of the Australian Defence Force’s flight training program after Lockheed Martin Australia’s bid edged out BAE Systems in Tamworth to be awarded the 25-year, $2 billion air contract.

BAE Systems, which employs more than 114 people in Tamworth, will continue to provide basic pilot training until the end of 2019 under the interim contract, before the training system is up and running from the RAAF Base at East Sale.

In a statement yesterday, the Department of Defence said an independent analysis predicted the shift will benefit the Gippsland economy by $500 million over the next 25 years.

BAE Systems has been training ADF pilots in Tamworth since 1992 and the Tamworth facility is also used by other defence groups, including the Republic of Singapore and the Royal Brunei Air Force.

The Department of Defence said it “will work closely with BAE” over the next four years to promote the flight training opportunities offered at Tamworth.

Tamworth Business Chamber’s Tim Coates said the contract loss was concerning for the local economy.

“It’s extremely disappointing,” he told The Leader yesterday.

“I’m looking forward to what the local federal MP has in the works as he alluded to at a chamber event approximately three months ago.”

Yesterday’s announcement by Defence Minister Kevin Andrews had been widely speculated for months, after defence circles predicted the loss, and in May, The Leader revealed politicians and defence heavyweights were trying to hose down reports Tamworth and BAE had lost the contract.

It could also spark heated debate in the Coalition and Nationals partyroom, with Gippsland MP and defence parliamentary secretary Darren Chester also a federal Nationals MP, and serving in Tony Abbott’s ministry, alongside New England MP Barnaby Joyce.

Yesterday, Mr Joyce told The Leader he was disappointed with the announcement but was working on a transition plan.

“I have no doubt that the air training school at Tamworth will continue to operate,” he said.

“It won’t stand dormant, it’s not in BAE’s interest, it’s not in our interest, it’s not in Tamworth’s interest.

“It’s just like a vacancy in a shop, and that’s exactly what will happen, it will be used by just a different tenant.”

Mr Joyce said Tamworth had been at the forefront of discussions between the prime minister, the defence minister and the Singaporean government and its air force.

“[BAE] is not the end of the world, you get another tenant,” he said.

Yesterday, Mr Andrews tweeted a photo of his visit to the RAAF base in Victoria and said the new East Sale base would have an annual intake of 165 trainee pilots from 2019.

“The new training system is expected to increase the Gippsland region’s income base by $17-19 million per annum,” he posted. 

Mr Chester could not contain his excitement over the contract awarding, posting a photo to Twitter.

“Great to meet future RAAF pilots at today’s big announcement of AIR5428 at East Sale #lovegippsland,” he tweeted.