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EADS: KC-X tanker to be awarded next month

by Staff Writers
Paris (UPI) Jan 13, 2011
European defense giant EADS expects the Pentagon to award the $35 billion KC-X tanker contract as early as next month.

"The contract award … was to have been around the middle of November last year. It has moved toward next month," EADS North America Chief Executive Officer Sean O'Keefe said Wednesday in Paris, citing information from the U.S. Defense Department.

European Aeronautic Defense and Space Co. is in a fierce competition with U.S. arch-rival Boeing for the contract to outfit the U.S. Air Force with 179 in-flight refueling tankers.

The contract award date has been pushed back several times. The Air Force initially said it would award the contract in the fall and then before the end of this year.

Both companies filed bids in July, after the Air Force granted EADS a 60-day bidding extension because its American partner, Northrop Grumman, pulled out of the competition. The Los Angeles company left saying the bidding conditions clearly favored Boeing, a claim denied by U.S. officials.

EADS is throwing its KC-45 tanker, a large plane based on the Airbus A330, into the race. The Americans are bidding with an altered version of its Boeing 767, called New Generation Tanker.

The New Generation Tanker is slightly smaller and probably cheaper than the KC-45 and has received substantial support from U.S. lawmakers; the European plane has logged more flight testing hours and is closer to serial production, experts say. Because it's larger, it's expected to also have a bigger fuel tank.

Boeing says its tanker program will employ 50,000 Americans. EADS claims its plan will employ 48,000 Americans.

Speculation has soared that Washington might split the contract and order planes from both companies. EADS has in the past said it would go for the full deal but would be ready to respond to any size of orders.

EADS Chief Executive Officer Louis Gallois at the same news conference said that EADS would pursue acquisitions in the United States, where it aims to gain a stronger foothold.

"We need to be more present in the U.S.," Gallois was quoted as saying by Defensenews.com.

Meanwhile, EADS daughter Airbus this week scored a major commercial aviation deal in India. Indian budget airliner Indigo aims to buy 180 Airbus A320s in a contract estimated to be worth around $20 billion. EADS said it's the largest single firm order number for large jets in commercial aviation history. Gallois at the news conference called it the "deal of the year."



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