Airbus, Boeing to bid on air tankers

TEXT OF STORY

Steve Chiotakis: Later this morning, the Pentagon unveils the bidding rules for $35 billion contract to build 179 air tankers. They're basically flying gas stations. This is the third time the Air Force has tried to buy these planes, but the procurement process has been plagued with problems. From Washington, Marketplace's Steve Henn reports.


Steve Henn: There are only two firms in the world are bidding on these massive flying tankers: Airbus and Boeing.

Scott Hamilton is an aerospace analyst for the Leeham company. He says for Boeing, winning this contract is about protecting its turf.

Scott Hamilton: Strategically, they sure as heck don't want Airbus to have a production facility foothold in the United States.

Boeing executives worry if its European rival wins this bid, eventually Airbus will end up building tankers, freighters, even passenger planes in Mobile, Ala.

And Paul Nisbet, an aerospace analyst for JSA Financial Research, says recently the World Trade Organization ruled the company was improperly subsidized.

Paul Nisbet: They call it launch aid that the European countries have been providing Airbus several billion for each new aircraft being developed.

But yesterday, the Air Force told lawmakers the WTO ruling would not damage Airbus's chances.

In Washington, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.

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