Boeing To Offer Air Force New 767-Based Tanker

Titlu: Boeing To Offer Air Force New 767-Based Tanker
Sursa: http://news.airwise.com/story/view/1267742120.html
Autor: Reuters
Data: 04/03/2010

Citat :

Boeing said on Thursday it would offer the US Air Force an updated 767-based refuelling plane in a competition worth up to USD$50 billion.

Boeing unveiled the "NewGen tanker" saying it would upgrade its ageing 767 commercial jet with several "state-of-the-art" systems, including a new digital flight deck from its 787 and a new fly-by-wire refuelling boom.

Boeing's 767 tanker lost out in the last tanker competition to the larger Airbus A330 offered by Northrop Grumman and its European partner EADS, but the Pentagon cancelled the deal after government auditors upheld a Boeing protest.

Northrop and its supporters in Congress say the Air Force's final terms for this competition favour Boeing's smaller 767. Northrop is still weighing whether to submit a bid.

Boeing said its 767 "NewGen" tanker would meet the Air Force's 372 mandatory requirements and offered a low-risk manufacturing option, given existing Boeing plants in Kansas and Washington state, and longstanding relationships with suppliers around the country.

It said the aircraft would create "substantially more" US jobs than Northrop's A330-based tanker, and would be more cost-effective to own and operate, since it burned 24 percent less fuel. That would save the military about USD$10 billion in fuel costs over 40 years, Boeing said in a news release.

Boeing said the tanker's upgraded flight deck would feature electronic displays on screens that were 75 percent larger than on a commercial Airbus A330 and would use a new-generation fly-by-wire boom with an increased fuel offload rate.

The tanker would also offer its air crew unrestricted access to the full flight envelope for threat avoidance, rather than allowing computer software to limit combat manoeuvrability.

Boeing's statement included remarks from its defence chief, Dennis Muilenburg, as well as his predecessor Jim Albaugh, who now runs the company's commercial operations, underscoring Boeing's unified approach to the competition.

Analysts said Boeing's commercial division was not fully committed to the last tanker bid, which resulted in higher pricing than the Pentagon had expected.

"The NewGen Tanker will draw on the experience and talents of an integrated US tanker team, including the best of our Boeing defence and commercial businesses and our nationwide supplier network," said Albaugh, president and chief executive of Boeing Commercial Airplanes.

Loren Thompson, chief operating officer of the Virginia-based Lexington Institute, said the new 767-based tanker would be "considerably simpler" than the one it bid in the last competition, which had included parts of different 767 models and was downgraded as possibly risky by the Air Force.

He said Boeing's announcement would put pressure on Northrop and EADS to make a decision soon on whether to bid.

"Boeing is straining to prove that it is responsive and motivated," Thompson said.

Northrop said this week it was still evaluating the final terms for the competition, but was closer to a decision.

Senator Jeff Sessions, a Republican from Alabama where Northrop had planned to assemble its tankers, told the Senate Armed Services Committee on Thursday that the Air Force's final rules for the competition still clearly appeared favour Boeing.

Sessions and the other Republican senator from Alabama are maintaining holds on several nominees for top Air Force and Pentagon jobs over the issue.

Air Force Secretary Michael Donley told the Senate Armed Services Committee that the Pentagon had worked hard to structure a fair competition, and said it would evaluate the costs and benefits of both a smaller and larger plane.

"We believe this is a fair approach. It's balanced and it has favoured no one," Donley said.

update :

Titlu: Northrop Declines To Bid For US Tanker Work
Sursa: http://news.airwise.com/story/view/1268087881.html
Autor: Reuters
Data: 08/03/2010

Citat :

Northrop Grumman said it would not bid in the US Air Force's multi-billion dollar aerial tanker competition after concluding the rules favoured Boeing's smaller 767-based plane.

The company said on Monday it would not protest the final request for proposals (RFP) to avoid any further delay in getting new aircraft to replace the ageing fleet of nearly 50-year-old KC-135 tankers, although it felt it had "substantial grounds" to support a protest or court decision in its favour.

Northrop chief executive Wes Bush said Northrop remained convinced that the A330-based tanker it offered with EADS would be better value for the Pentagon, but said it had a responsibility to its shareholders to spend corporate money wisely.

"Investing further resources to submit a bid would not be acting responsibly," Bush said.

Ralph Crosby, chairman of EADS' North American unit, said his company was disappointed, given that the Air Force had chosen the larger A330-based tanker last time around, and it was chosen over Boeing's plane in the five last international competitions.

"The Defence Department's RFP ignores the added combat capability that could be provided to our military and, for the first time, ensures that our allies will operate with superior capability in this vital mission area," Crosby said.

The Northrop decision prompted disappointed statements by its supporters in Alabama, where Northrop and EADS had planned to assemble the planes, creating thousands of new jobs.

Representative Jo Bonner said he was disappointed that the Pentagon would now pursue a sole-source contract with Boeing despite President Barack Obama's policy against such deals.

"Frankly, I am outraged at the Defence Department's bungling of this contract for what is now the third time," Bonner said. "The president must now intervene to protect the interests of the taxpayer and the men and women of our military."

Senator Richard Shelby, also of Alabama, said the Air Force's refusal to make substantive changes showed that politics had trumped the needs of the military.

"This so-called competition was not structured to produce the best outcome for our men and women in uniform; it was structured to produce the best outcome for Boeing," Shelby said in a statement.

To win, Northrop would have had to pare its profit to a low level, and then abide by a fixed-price contract for nearly two decades, with only a small adjustment allowed for inflation.

Northrop and EADS won the last competition in February 2008 with an Airbus A330-based tanker plane, but the deal, valued at around USD$35 billion, was later cancelled after government auditors upheld a Boeing protest.

Northrop told the Pentagon in December it would not submit a bid in this follow-on competition unless there were significant changes to the Air Force's draft rules, which Northrop said clearly favoured Boeing's smaller 767.

An earlier sole-source deal with Boeing collapsed amid a major procurement scandal that sent a former senior Air Force official and Boeing's former finance chief to prison for violating federal conflict of interest laws.

update 2

Titlu: EADS Hit By Tanker Loss, A380 Superjumbo Costs
Sursa: http://news.airwise.com/story/view/1268133265.html
Autor: Reuters
Data: 09/03/2010

Citat :

Airbus parent EADS ruled out a solo bid for a lucrative US tanker contract and said production niggles on its A380 superjumbo would hit core profit substantially this year.

The Franco-German group also axed its dividend when posting a big loss for 2009 including a previously announced charge of EUR€1.8 billion euros (USD$2.4 billion) for its share of last week's bailout for the A400M military transport.

But EADS was confident enough in a nascent aviation recovery to plan an increase in single-aisle Airbus A320 production to 36 a month from December from 34, and said it expected stable revenue and a 2010 operating profit of around EUR€1 billion.

US TANKER

On Monday, EADS' US partner Northrop Grumman dropped out of the race to build a US military tanker, leaving US rival Boeing as the sole bidder.

EADS chief executive Louis Gallois told reporters Northrop's withdrawal from the tanker tender meant: "We have no chance to win in the competition in these conditions."

Airbus chief executive Tom Enders also dampened talk of an independent European bid, barring a change in the situation.

"I leave the political assessment to others. For me it is clear, however, that under the current conditions a bid makes no economic sense for Airbus," he said.

Politicians were quick to act.

European Union trade commissioner Karel De Gucht said it was "highly regrettable that a major potential supplier would feel unable to bid for a contract of this type."

The German government's coordinator for aerospace matters, Peter Hintze, said the United States should rethink its competition to supply aerial refuelling aircraft, while German economy minister Rainer Bruederle said the US government had given a clear advantage to Boeing.

Evolution Securities analyst Nick Cunningham said the US tanker news was a "shock... That may not be done yet though."

RESULTS

EADS posted a 2009 net loss of EUR€763 million and an operating loss of EUR€322 million, compared with net profit of EUR€1.57 billion and an operating surplus of EUR€2.8 billion in 2008.

"The A380 continued to weigh heavily on the underlying performance," EADS said, adding it had also suffered exceptional foreign exchange effects.

Total currency effects hit 2009 earnings before interest and tax by EUR€2.5 billion compared to 2008, it said.

EADS excludes some exceptional items and goodwill from its standard reporting of operating income, but has recently used another yardstick stripping out other one-off items such as the A400M to allow investors to gauge its underlying business.

Such operating earnings before one-offs generated a EUR€2.2 billion profit in 2009, beating a company forecast for EUR€2 billion. Weakness in commercial aerospace was offset by strength in defence including higher Eurofighter export deliveries.

In a surprise move, EADS announced the planned increase in output of its most popular family of single-aisle planes, the A320. However, it said it had used up some of the "buffers" in development of its future mid-sized A350.

"I feel we can now turn our attention to growth again," Gallois told analysts. Boeing, whose 2009 profit beat forecasts, said last month it was seeing improved demand for airliners.

But DZ Bank analyst Markus Turnwald said: "The (EADS) outlook for 2010 is very disappointing due to deteriorating (currency) hedge rates and further A380 problems.

update 3 (si cu cateva info despre A400 M) :

Titlu: EADS Has Received No Word From US On Tanker
Sursa: http://news.airwise.com/story/view/1268656764.html
Autor: Reuters
Data: 15/03/2010

Citat :

Airbus parent EADS has received no word of any changes to a contest to supply aerial refuelling tankers to the United States, the head of Airbus Military said on Monday.

A source familiar with Pentagon thinking said on Friday the United States may extend a deadline for bids on its aerial refuelling tanker to give EADS an opportunity to consider whether to compete against Boeing on the project.

EADS partner Northrop Grumman boycotted the tender last week, saying the rules favoured Boeing.

Airbus Military head Domingo Urena said he had nothing to add to company statements last week when EADS ruled out bidding as a team with Northrop.

"You know the situation today and I think we will define the position of the company as information comes in," he said.

Company executives have said it has no plans to mount a solo bid without a US partner, but have not ruled out bidding with a new partner if given more time.

Asked at a breakfast with journalists whether EADS believed it would be given more time to weigh up its options, Urena said: "We have received nothing".

On the delayed A400M European airlifter programme, Urena reiterated a target of 500 future plane exports. This includes a target of 200 to the United States, home to the Lockheed MartinC-130 and Boeing C-17 transporters.

But he said EADS would not rush into an export campaign, giving first priority to stabilising the troubled programme for domestic European buyers.

The A400M has been hit by delays and cost overruns, forcing European nations to step in with a EUR€3.5 billion euro bailout including EUR€1.5 billion to be repaid from future exports.

Urena declined to say whether EADS would partner Northrop in any A400M export drive to the United States, saying Northrop was a reference point for EADS but "not the only one".

The A400M will be delivered first to France in 2013, followed by Britain and Germany, Urena said.

Urena said the company would produce 4 A400Ms in 2013 and 8 in 2014. He said 2015 would be a transitional year on the way to series production of 24 planes from 2016.

Seven European NATO nations have ordered 180 planes. The group also includes Belgium, Spain, Luxembourg and Turkey.

Malaysia is so far the only export client after South Africa to have cancelled an order last year. Urena said Airbus remained in talks with South Africa to understand its reasons.

Two South African firms are involved in help to build the A400M and Urena said these contracts would be fulfilled.

He confirmed that EADS and a group of engine makers had filed claims and counter-claims over A400M delays but said there was no formal litigation.

update 4 (devine absolut interesant subiectul, se discuta si la radio azi de dimineatza) :

Titlu: EADS to temper US growth plans: Gallois
Sursa: http://www.flightglobal.com/articles/2010/03/19/339645/eads-to-temper-us-growth-plans-gallois.html
Autor: Stephen Trimble
Data: 19/03/2010

Citat :

Airbus parent EADS may formally extend the timetable on "ambitious" growth objectives in the US defence and security market in the wake of its withdrawal from the $35 billion US Air Force KC-X refuelling tanker competition.

It is not clear how much the opportunity to sell 179 Airbus A330-based tankers over the next two decades to the US Air Force figured in a 2020 EADS growth strategy. This called for expanding non-Airbus sales for its North American business from about $1.7 billion this year to $10 billion over the next decade.

Chief executive Louis Gallois says: "It's clear we have to be less ambitious without the tanker [contract]."

Gallois told an EADS North America investors forum that any adjustment to the 2020 growth strategy based on the KC-X result would be made before May. Northrop Grumman, EADS North America's partner in the KC-X contract competition, decided on 8 March to not submit a bid over complaints of competitive bias.

The company launched its North American strategy in 2002, establishing the EADS NA subsidiary and appointing Ralph Crosby as chief executive. Five months ago, Crosby was elevated to chairman and EADS replaced him with former NASA administrator Sean O'Keefe.

The company established a manufacturing foothold in the US defence market by winning an army contract to build 345 UH-72 Lakota light utility helicopters. EADS is assembling the UH-72s at a new plant in Columbus, Mississippi.

Capturing the KC-X contract, however, was the prize in the EADS expansion strategy. The Northrop/EADS team won the contract in February 2008, but the award was overturned by the Government Accountability Office four months later.

The USAF attempted to rerun the contest this year, but Northrop decided the terms of the evaluation biased the competition in favour of the Boeing KC-767.

EADS has not ruled out interest to submit an independent bid for the contract, although Gallois says he agrees with Northrop's reasons for withdrawing.

Moreover, Gallois also says it would be "impossible" to submit for EADS to submit an independent bid within the USAF deadline on 10 May.

L.E. - se pare ca se va amana termenul limita pentru depunerea dosarelor pentru a putea eventual cuprinde si o oferta din partea EADS : http://www.lefigaro.fr/societes/2010/03/19/04015-20100319ARTFIG00331-ravitailleurs-les-etats-unis-prets-a-relancer-eads-.php

Titlu: EADS Nearing Decision To Bid For US Tanker
Sursa: http://news.airwise.com/story/view/1269643819.html
Autor: Reuters
Data: 26/03/2010

Citat :

European aerospace giant EADS is nearing a decision to compete directly with Boeing for a contract to build billions of dollars of aerial tankers for the US Air Force.

What's more, there is much to suggest that EADS will follow through with a bid, now that it has been granted prime contractor status by the Pentagon and is on the verge -- according to several sources -- of receiving a 90-day extension that would give it time to examine classified documents critical to a tender.

Northrop Grumman and EADS beat Boeing to win the last competition just over two years ago, but Defence Secretary Robert Gates cancelled the projected USD$35 billion deal after government auditors upheld a Boeing protest.

Northrop decided earlier in March that the rules for the latest tender were skewed in favour of Boeing and dropped out of the bidding.

Airbus parent EADS, eager to expand its foothold in the lucrative US market, had a different assessment of the risks than Northrop from the start, but its officials were unable to convince Wes Bush, Northrop's new chief executive, to sink another USD$100 million in a second bid for the deal.

Northrop's decision to withdraw prompted angry statements from European leaders concerned that Washington's rewritten rules for the competition amounted to a protectionist plot to lock out Airbus, Boeing's arch rival.

The prospect of a sole-source award to Boeing has also been worrying to some lawmakers and senior Pentagon officials, given that an earlier sole-source deal with Boeing collapsed in the biggest Pentagon procurement scandal since the 1980s.

Against that backdrop, US defence officials offered EADS, coveted "prime contractor" status, or permission to lead a bid. This is not only more lucrative but puts the European company in an inner circle of strategic defence players on a top priority acquisition. EADS has so far only led projects for US Army and Coast Guard helicopters.

The Pentagon also said it would consider EADS' request for three extra months to allow it to examine classified materials previously only available to Northrop and mount a solo bid.

The Pentagon has not given a timetable for its decision, but several sources who are closely following the issue said they expected a 90-day extension to be announced as early as next week, followed by an EADS statement on its plans.

Talk of extending the bid deadline has drawn the ire of Boeing's supporters in Congress, who are doubly incensed by the Pentagon's statements that this week's ruling by a World Trade Organisation panel will not figure into the tanker contest.

The panel concluded that Airbus had benefited from illegal government subsidies, including aid to develop the A330 wide-body it would pit against Boeing's 767.

LEANING TOWARD A PRIME BID

Given all that, sources on both sides of the Atlantic say the French-German group may feel compelled to mount a bid, even if the competition promises to be a massive uphill battle.

Senior EADS officials are gravitating toward mounting a solo bid but have not yet finalised their decision.

"They are not there yet," said one source who was not authorised to speak on the record.

Scott Hamilton, aerospace analyst with Leeham, said no final decision had been made but he expected EADS to bid.

"I get the real sense that they're leaning in that direction, notwithstanding the reservations that they have over the way the (request for proposals) is crafted," he said.

"I believe that EADS sees a path where they could submit a bid with a reasonable chance of winning that Northrop did not see and for different reasons," he said, noting that EADS had less reservations about fixed-price contracts than Northrop, given its experience with commercial airliner deals.

The company has also delivered its UH-72 light utility helicopters to the US Army on cost and schedule, he said.

One European source suggested that a decision by EADS not to bid after all could burn the company's bridges with the Pentagon at a time when EADS is actively eyeing other weapons deals, including a new armed helicopter based on the UH-72.

The tanker deal is a core strategic issue for EADS, not only because it is dominated by Airbus revenues but because it still striving to be taken seriously as a world defence player -- the D in its name -- after pooling French, German and Spanish aerospace interests 10 years ago. EADS also wants to keep its options open in case Congress or the Pentagon ultimately decide to buy tankers from both teams.

STRATEGIC IMPORTANCE

"If there is something on the table especially as prime contractor then EADS must be involved," said one source who favours a bid but was not authorised to speak on the record.

Sources familiar with the matter said Airbus chief executive Tom Enders remained sceptical about the merits of a bid, not wanting to embark on another "adventure" without knowing the risk, after a cost overruns on the A400M transporter.

EADS' North America Chairman Ralph Crosby, a former Northrop executive, also was initially wary until the Pentagon offered EADS prime status, a move which took many people on the European side by surprise.

Work on the tanker would also give EADS a large production facility in the United States, helping it to hedge against dollar-euro exchange rate fluctuations, said Hamilton.

He said the prospect of Airbus commercial production in the United States was Boeing's biggest concern in the long saga: "Boeing wanted to move heaven and earth to prevent that."

EADS officials are still waiting to see some classified documents in the Air Force's request for proposals that it had not been able to view as a subcontractor to Northrop, documents that help chart out how many fighters the Pentagon would plan to deploy overseas in the event of another war.

Company officials also need training by the Air Force on how to use the complex computer models used to calculate the effective fuel use of the rival tankers, which are dispatched in groups to refuel fighter jets and other planes in mid-air.

Another source familiar with the issue said EADS could still decide to skip bidding if it concluded that the larger A330-based tanker would not be competitive in what analysts say will essentially be a price shootout with Boeing's smaller 767. "They've said all along that there are other factors besides just the timetable for submitting bids," said the source.

But those pushing for an EADS bid argue that Boeing may not be able to price its 767 as cheaply as some may think, since it is offering an upgraded version of its 767 tanker.

That could bring the prices of the A330 and 767 tankers closer than expected, possibly within the 1 percent range that would allow the Pentagon to assess the A330's greater capabilities, said Hamilton, predicting EADS would then win. Hamilton cautioned, though, against overstating the risk involved in Boeing's plan to modify its 767 for this round, and said talk about Boeing's "Frankentanker" last time was "devilishly clever and effective, but unfair."

He said Boeing had long years of experience building new models of current planes by adding new wings or making other adjustments, even on the P-8 surveillance plane it is building for the Navy: "Boeing has been doing this for decades."

Titlu: Pentagon Would Extend Tanker Deadline If EADS Bids
Sursa: http://news.airwise.com/story/view/1270123141.html
Autor: Reuters
Data: 01/04/2010

Citat :

The Pentagon will extend the deadline for bids on its refuelling aircraft contract by 60 days if EADS formally pledges to bid against Boeing.

The announcement on Wednesday came a day after President Barack Obama vowed to run a fair and open competition for the new aerial tankers during a news conference with French President Nicolas Sarkozy.

EADS said it would consider the 60-day extension but also said it had told US officials it needed a 90-day extension to the May 10 deadline, the minimum time needed to prepare a bid.

Pentagon press secretary Geoff Morrell told reporters that a decision was expected from EADS within the next several weeks, but stressed that the US Defence Department did not plan to change any requirements in the competition besides the deadline.

"It is not uncommon to grant reasonable extensions in competitions of this sort, and we consider 60 days to be reasonable in this case," Morrell said.

But Boeing backers in Congress blasted the decision saying the Pentagon was bending the rules to placate Europe in the contest that could be worth USD$50 billion.

EADS is deciding whether to bid alone after its US partner, Northrop Grumman, pulled out of the race saying the contest terms clearly favoured the smaller Boeing 767-based tanker over the A330 built by EADS' Airbus unit.

EADS and Northrop won the previous US Air Force tanker contest in February 2008, but the Pentagon cancelled that deal after government auditors upheld a Boeing protest.

Obama had assured French President Nicolas Sarkozy on Tuesday that the competition would be completely transparent, open and fair.

Sarkozy, saying he trusted Obama, said EADS would bid if the terms of the competition were fair.

France holds a 15-percent stake in the French-German company, but has no say over its strategy.

Guy Hicks, spokesman for EADS North America, said on Wednesday that the company has carefully assessed the many requirements necessary to participate in the tanker contest.

"We have firmly indicated that a 90-day extension would be the minimum time necessary to prepare a responsible proposal for this... programme. We will consider the (Defence) Department's decision to offer a 60-day extension."

Boeing's supporters in Congress blasted the Pentagon's decision, saying that the World Trade Organisation had recently ruled that EADS benefited from illegal subsidies on its commercial aircraft programmes.

"It is outrageous that the Obama administration has caved to European lobbying one day after meeting with French President Nicolas Sarkozy," said Representative Todd Tiahrt, a Republican from Kansas, where Boeing has a large facility.

"The Department of Defence must reverse course and stop placating the Europeans who were just found guilty of providing illegal subsidies that put American workers at a competitive disadvantage," he said, predicting the move would spark much opposition in Congress.

Morrell rejected that international or local politics had played any role in the decision.

"Politics are not a part of this process, never have been, never will be... We have been and continue to make decisions on this critical programme based solely on the law of the land and the needs of our war fighters," he said.

Titlu : EADS Close To Decision On US Tanker Bid
Sursa : http://news.airwise.com/story/view/1270821822.html
Autor : Reuters
Data : 09/04/2010

Citat :

Airbus parent EADS is close to a decision on bidding for a deal worth up to USD$50 billion to supply air tankers to the United States, sources close to the matter said on Friday.

The European company has been given extra time to decide whether to stay in the race after former partner Northrop Grumman pulled out on the grounds that the rules for the contest favoured Boeing, a charge denied by Washington.

Sources have said L3-Communications is seen as front-runner to be chosen as a major supplier to install sensitive electronics work if EADS, as observers expect, offers its Airbus A330 airframe against a redesigned Boeing 767.

One source, however, said EADS North America was still examining two alternative offers from Raytheon and the US unit of Britain's BAE Systems.

EADS was junior partner to Northrop when the transatlantic team won a previous contest to supply the planes in 2008, but the deal was overturned after a protest from Boeing.

This time EADS has been invited to bid through its North American subsidiary as the senior partner or prime contractor, handing it an opportunity to raise its profile in the lucrative US defence market while bringing in a local partner.

EADS executives meeting on Friday will discuss whether to pursue that opportunity or conserve resources for cash-hungry aircraft development projects in Europe. Sources said it was unclear whether a final decision would be taken then.

An EADS spokesman declined to confirm Friday's talks but said: "Everyone is working hard to put together all the necessary facts to take a decision as soon as possible."

Boeing and supporters in Congress have complained that EADS was given an extra 60 days until July to enter a bid, saying this adds an unjustified wait to years of delay in replacing the US Air Force's ageing fleet of refuelling planes.

Boeing said last week it was reviewing all options.

Sources on both sides of the Atlantic have said EADS is leaning towards bidding despite some internal reservations about embarking on a major new campaign shortly after a recent funding crisis on its European A400M military airlifter.

Airbus Military meanwhile said the second A400M test plane had successfully carried out a maiden flight on Thursday.

Titlu : EADS Triggers USD$50 Billion US Tanker Battle
Sursa : http://news.airwise.com/story/view/1271805979.html
Autor : Reuters
Data : 20/04/2010

Citat :

Airbus parent EADS braved awkward financial odds and a growing storm in Congress by challenging Boeing for an aerial tanker deal worth up to USD$50 billion, sources said on Tuesday.

The decision to re-enter the contest after seeing an earlier victory quashed on appeal, ends a phoney war over its ambitions that saw the support of potential allies waver and critics advise the European firm to keep out.

A source familiar with the matter said EADS had informed the Pentagon earlier on Tuesday that it would compete for the aerial tanker contract.

An EADS decision to bid is certain to trigger a politically charged campaign over jobs and transatlantic competition ahead of Congressional elections in November, with a final decision on the choice of plane due shortly before Americans vote.

Boeing and Airbus are locked in a row over civil subsidies.

Norm Dicks, chairman of the House of Representatives Defence Appropriations panel, said last week he hoped EADS would not launch a bid.

On Monday Republican Senator Jeff Sessions accused Dicks, a Democratic congressman from the big Boeing state of Washington, of trying to intimidate EADS' would-be partners.

"There are going to be a large number of obstacles that will be faced," said Howard Wheeldon, senior strategist at BGC Partners in London.

The Pentagon has given EADS until May 10 to signal whether it plans to bid for the work and July 10 to file a full bid.

Sources close to the matter, who were not authorised to speak publicly, said on Monday that EADS would bid alone for the contract after failing to secure a key supplier.

EADS will still be backed by a big team of suppliers including engine maker General Electric, Honeywell International and Rockwell Collins to name a few, said the sources, who asked not to be named.

But the team will not include -- at least for now -- a US company that would have done classified work on the A330-based tanker and helped to manage the huge programme, they said.

DIFFICULT CONTEST

Analysts said EADS faces a tough battle by offering the A330 against the smaller 767 plane being offered by Boeing.

"I think there is next to no chance that EADS can win the tanker competition as it stands today," said Macquarie Securities analyst Rob Stallard.

"The request for proposals (RFP) clearly favours the 767, and Boeing has put significant political capital into securing this win. What EADS can get out of the competition is the goodwill of the Department of Defence" he added.

Boeing was not available to comment.

EADS won a previous competition against Boeing in 2008 in a bidding team led by Northrop Grumman, which would have converted Airbus jets and crammed them with combat electronics.

The award was later overturned on appeal from Boeing. Northrop last month pulled out of a rematch, saying revised rules favoured Boeing - a charge both Boeing and buyers deny.

In a dash to stay in the race, EADS held talks with L-3 and Raytheon, as well as others, over the possibility of their supporting a bid to be led this time by EADS itself.

But the European company was forced into yet another rethink when front-runner L-3 cooled on the deal.

Titlu: EADS Enters USD$50 Billion US Tanker Contest
Sursa: http://news.airwise.com/story/view/1271908491.html
Autor: Reuters
Data: 22/04/2010

Citat :

Airbus parent EADS said it will compete head to head with Boeing for a US military refuelling plane contract worth up to USD$50 billion, plunging headlong into what analysts say will be an uphill battle.

"This is a hell of an opportunity," Ralph Crosby, chairman of EADS North America, said on Tuesday in announcing the decision.

Crosby led EADS' last tanker bid with partner Northrop Grumman, which has since dropped out, complaining the latest contest terms favour Boeing's smaller aircraft.

EADS felt "almost compelled" to enter the competition given its view that its A330-based tanker is superior to Boeing's 767-based tanker, he said.

An EADS tanker built for Australia -- already flying and to be delivered by year's end -- would be virtually identical to the company's US tanker offering, Crosby said.

"When you've got the best, you've got to offer it," Crosby told reporters at a news conference in Washington DC, where he was joined by executives from over a dozen EADS suppliers, including General Electric, Honeywell International and Goodrich.

Northrop and EADS had won the last US tanker deal in 2008, but their projected USD$35 billion contract was killed after government auditors upheld a Boeing protest.

EADS North America chief executive Sean O'Keefe told reporters the company was confident that its A330-based tanker would meet all 372 of the Air Force's latest requirements.

"We intend to win. We're not bidding just for the benefit of producing more paper," O'Keefe said, when asked if EADS' primary motive was securing the goodwill of the Pentagon for other programs.

PENTAGON PROMISES FAIR CONTEST

Pentagon press secretary Geoff Morrell welcomed EADS decision and said the US Defence Department was committed to conducting a "fair, open and transparent" process.

He also underscored that the Pentagon would welcome other US companies joining the EADS bid. "We welcome any qualified American companies that wish to partner with EADS."

Representative Norm Dicks, who heads the House Appropriations defence subcommittee, angered EADS supporters last week when he told The Hill newspaper he hoped US firms would not join EADS.

Dicks comments came as L-3 Communications changed its mind about becoming a key supplier to EADS.

EADS officials declined to comment on the controversy on Tuesday. O'Keefe described the EADS team of over 200 suppliers as a "coalition of the willing." He said EADS could still add others to the team before it submits its bid.

US officials privately say they are pleased the third attempt to replace ageing KC-135 tankers will be a competition, rather than a sole-source deal with Boeing. An earlier lease-buy tanker deal with Boeing collapsed amid a huge procurement scandal.

Boeing said it remained deeply concerned that a "heavily subsidised" EADS would be able to take on more financial risk than Boeing could as a commercial company.

It said its 767-based tanker would meet all Air Force requirements and offered "low-risk" production, given existing Boeing facilities in Washington and Kansas. Boeing said the 767 tanker would also cost up to 20 percent less to maintain than the A330 tanker and was 24 percent more fuel efficient.

Lawmakers from Alabama, where the EADS tanker would be assembled, welcomed EADS announcement, but said they remained concerned that the competition favoured Boeing.

Boeing supporters in Congress blasted the Pentagon for extending the tanker bid deadline, even after the World Trade Organisation recently concluded that EADS benefited from government subsidies for its planes.

"It means we are bending over backwards to include a company that has broken the rules of fair play," said Senator Patty Murray, a Democrat from Washington state, where Boeing would build its 767 planes before modifying them in Kansas.

EADS UNDERSCORES COMMITMENT TO ALABAMA

Crosby said the A330 tanker would create tens of thousands of jobs across the country if it won. He also reiterated the company's pledge to build A330 commercial freighters in Alabama if it wins the US Air Force contract.

EADS officials said they were confident they could offer a competitive price for the A330, and were already working with suppliers to lower maintenance costs for the aircraft. They also said development of the EADS tanker was nearly complete, which would make its offer less risky than Boeing's.

But analysts said EADS faced an uphill slog.

"I think there is next to no chance that EADS can win the tanker competition as it stands today," said Macquarie Securities analyst Rob Stallard. "Boeing has put significant political capital into securing this win."

The Pentagon is now expected to extend the deadline for tanker bids by 60 days until July 9. It offered the extension after European governments accused Washington of engaging in protectionism with the revised tanker competition rules that prompted Northrop to quit the contest.

O'Keefe said US authorities had cleared EADS to perform classified work required on the tanker, which accounts for about 30 of the 372 requirements, insisting that EADS did not need another large US partner to proceed.

Titlu : Boeing Allies Aim To Boost EADS' Tanker Bid Price
Sursa : http://news.airwise.com/story/view/1273794299.html
Autor : Reuters
Data : 13.05.2010

Citat :

Twin bills that could help Boeing beat EADS for a potential USD$50 billion US Air Force contract were introduced in the US House of Representatives and Senate on Thursday by Boeing supporters.

The legislation would force the US Defence Department to adjust bids on its major purchases by the amount of any illegal subsidy under a final World Trade Organisation ruling.

In a final ruling, a WTO panel found in March that Airbus, a unit of EADS, benefited from billions of dollars of European government subsidies to develop its A330 wide-body aircraft, among other commercial planes.

EADS is pitting an Airbus A330 derivative against a modified Boeing 767 in a rematch to sell an initial 179 mid-air refuelling aircraft to the US Air Force. Bids are due July 9. The Pentagon has told the bidders to be ready to start work by November 12 if chosen for the deal.

The measure would apply to all companies, including Boeing, if it were found by the WTO to have received illegal subsidies, said Senator Sam Brownback, a Kansas Republican who introduced it in the Senate with four co-sponsors.

The goal of the Fair Defence Competition Act is to make sure "that illegal subsidies do not distort the defence procurement process," Brownback told reporters.

In response, the Defence Department repeated its contention that it is barred from unilateral retaliatory action for violations of trade regulations.

"That is the purview of the WTO," Pentagon press secretary Geoff Morrell said in an email. "If we were to do so, we would then be in violation of WTO rules and subject to disciplinary action."

A WTO panel is expected to make an interim ruling by the end of next month on European Union counter-complaints that Boeing has unfairly benefited from US federal, state and local subsidies. That would not constitute a final WTO determination under the measure.

Representative Todd Tiahrt, who put in the bill in the House with more than 20 co-sponsors, estimated that if it became law the Defence Department would have to add about USD$5 million per plane to an EADS' bid to offset the value of subsidies to the A330.

Tiahrt is a Republican from Kansas, where Boeing would do final assembly of its tanker. He and Brownback said the legislation complies with WTO rules in that it is non-discriminatory.

Brownback and Tiahrt said they would attach their bills to an annual defence authorisation act or another measure aimed at speeding them through Congress quickly enough to affect the tanker competition.

"We need an American tanker built by an American company with American workers. Even more so, we should never outsource a vital national security component," Tiahrt said. Boeing is based in Chicago.

The US Trade Representative's office had no comment on the bill.

FRICTION MOUNTS AS COMPETITION DRAGS ON

Concerned that it might be underbid, Boeing said on Thursday that it was deeply concerned "about the ability of a heavily subsidised EADS to accept levels of financial risk that a commercial company such as Boeing cannot."

"To date, these illegal subsidies have not been taken into account in this national security competition, even though the US government has proven in a world court that those subsidies are illegal and directly distort competition between Airbus and Boeing," said Jacqueline Ferko, a Boeing representative.

Guy Hicks, a spokesman for EADS' North American arm, said: "The Boeing bill is one more attempt to avoid competing on the merits of the tanker."

"Unlike EADS North America, Boeing doesn't have a tanker that meets requirements, it faces tremendous technical risk in producing one and is therefore determined to take away the warfighter's right to choose," he said in an email.

Boeing shot back, saying it has delivered 767-based tankers now serving in operational squadrons in Japan.

"And we will meet all 372 mandatory requirements for the next generation of tankers for America's Air Force. We consider our workforce and the factories here in the United States where they build airplanes a strength in this competition," added William Barksdale, a Boeing spokesman. "Ultimately, technical risk will be decided by the Air Force when proposals are evaluated."

Republican Senator Richard Shelby of Alabama, which would land an Airbus assembly plant if EADS wins, said, "This legislation will not protect American workers; it will ensure retaliation against them in all industries by our international trading partners."

EADS partnered with Northrop Grumman in a winning bid for the tanker deal in 2008, only to have it overturned after Boeing successfully protested on procedural grounds to US congressional auditors, which led to the rematch.

Titlu : Boeing To Bid For Tanker, Despite Concerns
Sursa : http://news.airwise.com/story/view/1274138918.html
Autor : Reuters
Data : 17.05.2010

Citat :

Boeing on Monday said it intends to bid in a multi-billion dollar US Air Force aerial tanker competition although it remains concerned that rival bidder EADS could have an advantage in the competition because it receives government subsidies.

Defense News on Monday quoted an unnamed senior Boeing executive as saying that Boeing was considering not bidding for the contract, valued at up to USD$50 billion, given concerns about whether the company could win the deal or make a profit.

The two companies must submit bids by July 9 to build 179 new aerial refuelling planes for the Air Force -- the US military's third attempt in nine years to begin replacing its ageing fleet of KC-135 tankers.

Defence analyst Loren Thompson said Boeing's top defence executive Dennis Muilenburg raised the possibility of pulling out of the competition with company insiders last week, apparently convinced that the Pentagon was "trying to rewrite the selection criteria to favour a team led by EADS."

In a blog posted by the Lexington Institute, Thompson said he doubted Boeing would truly withdraw from the competition, and its executives were probably being "paranoid," since the Air Force's framework still seemed to favour the smaller, cheaper Boeing 767-based plane over EADS' larger A330.

Boeing spokesman Dan Beck said the company planned to submit a low-cost bid that met all of the Air Force's requirements, but the company regretted that its concerns about subsidies to EADS, the parent of Airbus, would not be reflected in the Pentagon's evaluation of competing bids.

Boeing executives "are deeply concerned about the ability of a heavily and illegally subsidised Airbus/EADS to accept levels of financial risk that we cannot in a way that distorts the competition," Beck said.

One source following the issue said Boeing was keeping its options open, particularly if the Air Force made changes to the final request for proposals that appeared to favour EADS before the July 9 deadline.

But it was difficult to imagine Boeing withdrawing from a competition worth tens of billions of dollars at a time when overall defence spending is expected to flatten out or even decline, said the source, who was not authorised to speak on the record.

"I think that Boeing is playing with enormous fire here," said analyst Scott Hamilton of Leeham, adding that Boeing risked angering the Air Force and Defence Secretary Robert Gates by politicising the tanker competition.

Gates cancelled the last tanker deal, which Boeing had lost to EADS and Northrop Grumman, after government auditors partially upheld Boeing's protest and lawmakers became deeply involved in debating the procurement.

Boeing-backed legislation that would add the cost of any subsidy deemed illegal by the World Trade Organisation to major weapons contracts could also backfire, he said, noting that the trade body was due to rule next month on a European countersuit alleging that Boeing benefitted from illegal tax subsidies.

The WTO ruled earlier this year that Airbus benefitted from billions of dollars of European government subsidies to develop its A330 wide-body aircraft, among other commercial planes.

The Defence Department says it cannot factor the ruling into its procurement, given that it could still be appealed.

EADS declined comment on the Air Force's tanker procurement process, but said reports of a possible Boeing withdrawal were "another attempt to distract attention from the fact that EADS North America has a more capable tanker that is flying today, while Boeing can only offer an untested conceptual design."

One defence official said the Pentagon was keenly aware of the importance of the tanker competition and was at pains to ensure a flawless process this time around -- and that meant strictly limiting any conversations with the rival bidders.

"We know we have to get this right this time," said the official, who was not authorised to speak on the record.

Titlu : Boeing hints at KC-767 NewGen Tanker design
Sursa : Flightglobal
Autor : Stephen Trimble
Data : 21.07.2010

Citat :

In a huddle with reporters after a press briefing, a Boeing executive offered the most tangible hint to date that the KC-767 NewGen Tanker blends major structural components from different aircraft models.

Charles Johnson, Boeing vice president of air force mobility, told reporters during the briefing that it will not be "easy" for EADS North America to adapt the KC-45 with cockpit armour and defensive systems.

Asked afterward if Boeing could reassure the public that the KC-767 NewGen Tanker would require less challenging design changes, Johnson said he could.

A reporter noted that Boeing's KC-767 design featured a wing and fuselage from different aircraft models, which would seem to pose a greater redesign challenge than integrating defensive systems and cockpit armour.

Johnson replied that "it's pretty straightforward actually" to install a wing from a different model on to the 767-200 fuselage.

Johnson cited the example of the Boeing P-8A programme, which matches the wing of the 737-900ER to the fuselage of the -800 and is built in-line rather than modified afterward.

That was the closest Boeing has come to revealing details of the structural design of the KC-767 NewGen Tanker. In the last round of the KC-X competition, Boeing faced criticism for blending elements of three different 767 models into the so-called "frankentanker".

A day earlier, Boeing executives at a media roundtable pointedly declined to link the experience on the P-8A programme to the NewGen Tanker design, saying that doing so would be giving away competitive information.

Instead, Dennis Muilenburg, offered only one other key detail about the NewGen Tanker.

In response to questions, Muilenburg revealed the KC-767 NewGen Tanker includes a boom based on the hardware of the KC-10 and upgraded with fly-by-wire controls developed for the KC-767s purchased by Italy and Japan.

Boeing had previously indicated the system includes fly-by-wire, but had not disclosed the system for KC-X came from the Italian and Japanese tankers.

It seems a small detail, but it's one of the few specific disclosures that Boeing has allowed to be released in the intense competition for a contract award to build up to 179 tankers.

Titlu: Boeing goes on new KC-X offensive
Sursa: Flightglobal
Autor: Stephen Trimble
Data: 27.07.2010

Citat :

Boeing launched a new rhetorical offensive in the KC-X contract battle at Farnborough, reviving old criticisms about its rival's approach to hard envelope protection and non-feedback sidesticks.

Charles Johnson, Boeing vice-president of mobility, charged that the bedrocks of Airbus's cockpit philosophy would place military pilots in danger.

In response, EADS North America, which has proposed an Airbus A330-200 modified into the KC-45 tanker, shot back that the KC-767 NewGen Tanker poses the greater risk to pilot safety.

"Boeing is clearly raising these red-herring issues in an attempt to distract from its lack of a tanker and from the considerable risk it is offering the [US] Air Force by proposing a tanker that only exists on paper," EADS NA says.

The new debate aggravated the rhetoric on both sides of the debate, which had previously been mostly characterised by bickering over fuel capacity and commercial aircraft subsidies.

In marketing videos, Boeing had boasted about how the KC-767 is designed to give pilots full control to manoeuvre the aircraft in any situation, such as dodging a missile attack.

But company officials had so far refrained from directly criticising the Airbus hard envelope protection system, which is designed to limit the pilot's ability to manoeuvre the aircraft beyond preset limits.

The KC-767, by contrast, gives the pilot "complete, full access to the aircraft envelope", Johnson says, adding: "The pilot can always override" limits set by the flight controls.

"You want to be able to make [certain manoeuvres] and not always be limited," Johnson says.

EADS NA says that pilots in the A330 multi-role tanker transport - on which the KC-45 is based - are not limited to making any manoeuvre that they would need in combat.

Johnson also criticises the Airbus use of sidesticks that provide no feedback response to pilots. Boeing yokes are back-driven, allowing the pilot to feel a response from the flight controls even in a fly-by-wire aircraft.

"Boeing's condemnations of fly-by-wire technology are puzzling, given its extensive use of the same technology in many of its own military aircraft, and the air force's use of sidestick in some of its most successful aircraft," EADS NA says.