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EADS set to close UK's Future Strategic Tanker Aircraft deal news
12 March 2008

London: European Aeronautic Defence & Space Co looks set to finalize a refuelling deal in the UK immediately after its recent success in landing a prized US midair tanker contract in association with US defence major Northrop Grumman.

Airbus parent EADS and American partner Northrop Grumman Corp last month unexpectedly edged out Boeing Co for a contract to supply 179 tanker planes to the US Air Force in a deal that may be worth $40 billion in coming years.

Now, a consortium headed by EADS may be all set to finalise a long- awaited contract to supply 14 tankers to the UK's Royal Air Force.

Rather than an outright purchase, the UK's ministry of defence will lease the tanker planes from AirTanker, a UK company, whenever needed under a 27-year private-finance initiative, worth potentially GBP13 billion.

The consortium was named preferred bidder for the contract three year ago. Aside from EADS, the consortium includes Thales SA, Cobham Plc, Rolls-Royce Plc and VT Group Plc

AirTanker is dedicated exclusively to providing the Future Strategic Tanker Aircraft (FSTA) to the UK ministry of defence under what it describes as the world's largest Defence Private Finance Initiative contract. The service will deliver a service that provides comprehensive air-to-air refuelling and air transport capabilities to the RAF, using new A330-200 tanker transport aircraft.

AirTanker says that it expects to sign the FSTA contract in the next few months, and will then make detailed preparations to begin the service.

The tanker contracts fit into EADS' long-term strategy of raising the proportion of sales it generates from defence activities to 50 per cent by about 2020, from just 23 per cent in 2007.

EADS chief financial officer, Hans Peter Ring, told reporters in Paris that the UK deal should be closed within weeks.

EADS is also supplying tankers to Australia, the United Arab Emirates and Saudi Arabia.

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EADS set to close UK's Future Strategic Tanker Aircraft deal