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PARIS (Reuters) - NATO faces significant costs if it does not act soon to choose a successor for its ageing fleet of 14 Boeing E-3A Airborne Warning & Control System (AWACS) surveillance aircraft, often called the alliance’s “eyes in the sky”, senior officials said.

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FILE PHOTO: A NATO AWACS (Airborne Warning and Control Systems) aircraft approaches the Air Base number 5 during the Real Thaw 2018 exercise in Monte Real, Portugal February 6, 2018. REUTERS/Rafael Marchante/File Photo

Michael Gschossmann, general manager of the North Atlantic Treaty Organization agency that manages the AWACS fleet, said he expected to finalize by December a $750 million contract with U.S. arms maker Boeing Co to extend the life of the aircraft through 2035, with $250 million more earmarked for design, spare parts and testing.

But he said it was critical to decide quickly how to replace the 1979/1980-era airplanes, with their distinctive radar domes on the fuselage, or NATO would need to take costly steps to keep them flying even longer.

“We have to get moving on this. We have to ensure that the studies move along quickly. We need a reality check,” he said.

The AWACS planes are among the few military assets owned and operated by NATO, rather than individual states. They are used to conduct missions such as air policing, support for counter-terrorism operations, evacuations, and crisis response.

Gschossmann told Reuters NATO could follow the lead of member states Britain and Turkey in purchasing the E-7, a newer radar plane also built by Boeing. Those aircraft, he said, were large enough to add potential new capabilities, such as operating drones for expanded surveillance, in coming years.

“We have to ensure that we acquire a system that has growth potential, but that also – for financial

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