Tankering by Europe

The KC-45A program has initially been awardedto Airbus. This is a huge step for US procurement.After decades of minor buys from European vendors,the USAF has taken its first step into buying aEuropean aircraft on a scale that represents asignificant investment. The award today, toNorthrop / EADS, for the Airbus 330 tanker couldlead to $100 billion in sales to Europe.

The process of confirming the contract has onlyjust started though. Boeing is sure to appeal thisdecision, which will delay the ultimate contractsigning for months, and could potentially changeit. Nobody thought the project would be a shoe-infor EADS, in fact it looked like this was Boeingscontract to lose. Beoings biggest beef will likelybe EC subsidies to Airbus. But Boeing itself hasto be careful it has it's own house in order, andthat lose leading R&D projects by the Pentagonaren't seen to influenced it's developments. Avery tricky problem.

The Boeing offer based on the 767 was asmaller, but more importantly, an older airframe.There clearly were advantages to using the 767 -it can get into and out of slightly more airports,for one. But the airframes age must also havepreyed on selectors minds.

If Boeing fails to win on appeal, the writingis on the wall for the 767. Maybe Boeing will comeback later in the program (5 or 10 years down theroad) and bid the 787 as a 767 replacement.

The Airbus 330 is a newer airframe design,larger, and in it's tanker role clearly able to domore, with more capacity for fuel, and space foralternative roles.

The Air Force has a history of buying aircraftwith one vision, and going in many otherdirections with the airframe when they are happywith it. The C-135 has an illustrious history inthe Air Force, being used for almost anything youcan think of. The new C-45 has possibly that samevaried life ahead of it.

Northrop / EADS bid included setting upassembly lines in Mobile, AL. This could helpAirbus with one issue it has had some trouble withrecently - the falling dollar hurting because itpays it's employees in Euros. Mobile employees,one presumes will be paid in green backs. How EADSwill see profit in the program will now become acurrency exchange issue.

Let the games begin! We hope that the lawyersare not the only winners in this contest.