Boeing wins US tanker contract after 10-year saga

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The Independent Online

the aerospace giant Boeing was last night awarded a $30bn (£18bn) deal to replace the US air force's ageing fleet of mid-air refuelling tankers, dashing the hopes of European rival EADS that it could win its first major US defence contract.

The victory for Boeing, which ran counter to days of industry gossip, comes at the third attempt and in the 10th year of a procurement saga.

A first Pentagon contract to lease a modified version of the Boeing 767 fell apart amid an ethics scandal, in which Boeing was revealed to have hired the procurement official responsible for awarding it the deal. Airbus won a revised contract in 2008, but Boeing appealed over flaws in the decision-making process, amidst a political outcry.

Both sides have had politicians lobbying for their bid, because of the jobs expected to be created in the states where manufacturing is based. In the end Boeing beat EADS on price, coming in 1 per cent cheaper than its rival.

The size of the contract could swell to well over $100bn if the US orders more planes, over the original 179 under yesterday's contract.

"Today's announcement represents a long-overdue start to a much-needed programme," the Air Force Secretary, Michael Donley, said last night.

EADS expressed "disappointment and concern", but described the tanker contract as "one business opportunity among many" in the US. It has 10 days to decide whether to appeal.

"Our team is ready now to apply our 60 years of tanker experience to develop and build an airplane that will serve the nation for decades to come," said Boeing's chief executive, Jim McNerney.