Airbus set to win Canadian deal for search-and-rescue aircraft: source

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People are silhouetted past a logo of the Airbus Group during the Airbus annual news conference in Colomiers, near Toulouse January 13, 2015. REUTERS/Regis Duvignau (Copyright Reuters 2016)

Canada is set to select Airbus Group to provide search-and-rescue (SAR) aircraft, a source familiar with the matter said on Wednesday, with Airbus beating Italy's Leonardo in winning the deal.

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A formal decision on the matter is expected on Thursday. Airbus Group and Leonardo both declined to comment on the situation.

Airbus Group SE's C-295 and Leonardo Aircraft's C-27J Spartan had emerged as the front-runners for the Canadian contract, estimated in media reports to be worth about C$ 3 billion ($2.3 billion).

The Canadian government has said the SAR aircraft procurement will allow the Royal Canadian Air Force to replace its current fixed-wing fleet of six CC-115 Buffalo aircraft and 13 CC-130H Hercules aircraft that are being used in Canada for search-and-rescue missions.

(Reporting by Tim Hepher and Allison Lampert in Montreal; Editing by Andrew Callus and Sudip Kar-Gupta)