EADS threatens to withdraw from US air tanker bidding

Business Materials 13 September 2008 19:53 (UTC +04:00)

European aerospace concern EADS has threatened to withdraw from the bidding for a 35-billion-dollar contract for new US air tankers after the Pentagon halted the competition, the German news magazine Der Spiegel reported Saturday.

"We will only submit a bid if we are sure we will have a fair chance," the weekly quoted a senior EADS manager as saying.

The US Defence Department on Wednesday cancelled the competition that pitted Airbus maker EADS against US rival Boeing, leaving a decision to the new US administration that takes office in January 2009.

Analysts quoted by Der Spiegel said the move would benefit EADS' rival, which has a chance to reenter the bidding with a new tanker aircraft with a larger fuel capacity.

EADS had won the contract for 179 Air Force tanker refuellers in partnership with the US concern Northrop-Grumman only to see it put on ice in July after a congressional oversight agency upheld a protest by Boeing.

Boeing complained that the Air Force chose the EADS version based on an Airbus 330 after being told that its 767 met the Air Force requirement. Boeing said it could have proposed its larger 777 instead had it been adequately told of the Air Force's needs.

Der Spiegel said the Defence Department needed two bidders for the contract in order to achieve a competitive price, dpa reported.