WORLD
Boeing Awarded Tanker Supply Contract By U.S. Army
As per the initial contract, Boeing is to supply 18 next generation aerial refueling tanker aircraft by 2017.
The total contract includes the supply of 179 refueling tankers, which media reports say is valued at about $35.0 billion, with the inital phase alone having a potential of about $3.5 billion.
Boeing chairman Jim McNerney said, "We`re honored to be given the opportunity to build the Air Force`s next tanker and provide a vital capability to the men and women of our armed forces..."
Boeing`s award of the contract is the culmination of a final tender submitted nearly a fortnight ago, when it contended that its 767-based, multi-mission aircraft delivers superior capabilities to U.S. warfighters and burns 24 percent less fuel than EADS.The KC-46A tankers will be built by a skilled U.S. work force at existing Boeing facilities. The award is expected to fuel the economy as it supports about 50,000 U.S. jobs.
The new KC-46A tankers will be a widebody aircraft with sophisiticated technology that includes a digital flight deck featuring Boeing 787 Dreamliner displays and a flight control design that gives more prominence to aircrews than to computer software. It will also have increased fuel offload rate.
But, the tender process has not been smooth sailing, as it had its share of controversies.
Initially, EADS said its plane was bigger and better. Also, lawmakers in Alabama were counting on EADS`s promise to build an assembly plant there, which would have added thousands of jobs and lifted their battered economy.
The bidding itself has seen a long run, since 2001, as the U.S. Air Force strived to get the tankers to replace the Eisenhower-era tankers.
In 2008, Northrop Grumman and EADS won the contract, which was canceled after Boeing cast aspersions on the tender process. Boeing also felt that EADS could benefit from European governments` subsidies, which would give it undue advantage.
Meanwhile, Northrop moved out last year, and the Pentagon gave more precedence to EADS, fearing that a lone Boeing in the fray could trump up prices.
BA closed Thursday`s regular trade at $70.76, up $0.53 or 0.75%, on a volume of 6.98 million shares on the NYSE. In after hours, the stock further gained $2.59 or 3.66%.