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EADS-Airbus to bid for $ 35 billion future air force tanker contract

EADS the parent company of Airbus announced Tuesday that it would participate in the contract competition to produce the next generation aerial refuelling tanker for the US Air Force.The deal is worth $ 35 billion covering some 179 planes that will replace the 1950’s era KC 135 .

In is a surprising turn of event and a bold move EADS is deciding to join the competition without Northrop Grumman with whom a partnership had previously existed.This stunning reversal of situation for EADS is taking the industry by surprise as experts had long surmised that EADS would never be a credible bidder without the support of the American giant Northrop Grumman.And Boeing had been considered as the natural winner for the competition.

From a logistical perspective EADS is still actively pursuing some form of partnership with a major American contractor.The solution KC-45 that EADS is presenting is built from the Airbus 330 and its application as a tanker has already been successfully marketed around the world with the A 330 MRTT program and selected by 4 air forces around the world.

The KC-45 would then be constructed in Mobile, Al where a brand new line would also produce the freighter version of the A 330 for the civilian market.

Sean O’Keefe, EADS North America Chief Executive Officer made the announcement n April 20th, 2010 taking by surprise industry experts and rival Boeing who had previously lost the competition against EADS in 2008.It wasn’t untill after Boeing protest of the fairness of the competition that the GAO recommended the voiding of the contract and further re re-initiating of the bidding process.GAO had concluded in July of 2008 that “the Air Force had made a number of significant errors that could have affected the outcome of  what was a close competition between Boeing and Northrop Grumman””.