EADS may not challenge Pentagon’s tanker award

04 Mar 2011

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Paris/Washington: European defence conglomerate EADS may not challenge a Pentagon decision to award a lucrative $30 billion refuelling tanker contract to rival Boeing Co, according to reports. The Pentagon acknowledged the "ugly" history of the tanker procurement process, but said US Air Force officials were convinced they had handled the process fairly this time and would prevail in any legal challenge.

Boeing 767 refuelling tankerEADS was locked in a decade-long battle with Boeing Co over the contract.

Reports now emerging suggest that EADS, the parent of Airbus, could announce as early as Friday that it would not protest last week's decision by the Air Force to award Boeing a contract for 179 new refuelling planes. The award had indeed taken the industry by surprise, given the fact that the last round of biddings had resulted in EADS winning the contract before the award was snatched away from them on a technicality.

Industry observers have noted the muted response that EADS has offered in public since the award was announced in favour of Boeing last week. It has said it was looking forward to competing for other US programmes.

Airbus chief executive Tom Enders was quoted by agencies as saying: "We have given our competitor a tough fight and forced them to offer a very low price. For Boeing, losing this would have been a disaster; for us it is only a lost business opportunity."

EADS officials were briefed by air force officials about the decision on Monday and again on Tuesday, and are still examining all the information.

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