Boeing Co was the “clear winner” in a U.S. Air Force tanker competition, the Pentagon said on Thursday, surprising analysts who had expected Europe’s EADS to win the deal, Reuters reports.
Air Force Secretary Michael Donley told reporters the contract was worth over $30 billion and Boeing’s shares rose 3.5 percent in after-hours trading.
The decision is also a major victory for East Hartford-based Pratt & Whitney, which is expected to build as many as 400Â engines for the 179 tankers. That work is expected to be done in Middletown.
Boeing, which could still face a contract protest from Airbus parent EADS, was awarded an initial $3.5 billion to design and deliver 18 planes.
It is the third effort in nearly decade to start replacing the Air Force’s Boeing-built KC-135 Stratotankers, built before man first landed on the moon.
The contest has sparked transatlantic tensions and clashes in Congress among lawmakers eager to bring high-paying aerospace jobs to their states.
“Boeing was the clear winner,” Deputy Defense Secretary William Lynn told reporters at the Pentagon.
He said EADS could protest the decision, but the Pentagon was convinced the decision was fair and transparent and there would be no grounds for a protest.
“We think we’ve established a clear, a transparent and an open process and we think we’ve executed on that and it will not yield grounds for protest,” Lynn told the briefing.
EADS last week said it would only protest if it saw egregious errors. On Thursday, it expressed disappointment and concern about the decision, but said the contract was just “one business opportunity among many” in the United States.
EADS did not say if it planned a protest. Company officials say they will wait until after a formal briefing by the Air Force, which is likely to occur on Wednesday.
EADS has 10 days to file a formal protest after a contract award and its congressional backers can also try to block the award legislatively. Several Alabama lawmakers said they would examine the decision carefully to ensure it was fair.
Teal Group analyst Richard Aboulafia called the decision “a major surprise” and said if it holds, Boeing will have succeeded in blocking EADS’s biggest defense initiative.
Aerial refueling tankers supply fuel to fighter planes and other aircraft in mid-flight, extending the range of military operations.
Air Force Chief of Staff General Norton Schwartz said he was pleased that troops would finally get a new refueling plane. “Let me just say that I’m pleased that this has produced an outcome … that we’ll get about delivering a capability that’s long overdue — and we’ll stop talking about it.”
EADS and Boeing, arch rivals in the market for passenger jets, have fought bitterly in public over the contest with expensive advertisements while their respective supporters have battled it out at dueling news conferences.
