ABOUT a month ago in this space I wrote about doubts that were arising over the US$ 25 billion contract that the European Airbus consortium had won to supply an initial 179 midair refuelling tankers to the US Air Force, with the prospect of an eventual total of 500. The contract was awarded by the Air Force at the beginning of this year but the US Government Accountability Office subsequently upheld complaints from Boeing, which also bid for the work, that the contract process was flawed in eight respects. Yesterday the Pentagon announced that new bids would be called for and assessed by the Pentagon itself instead of the Air Force.

This is a huge blow for Airbus whose A330 passenger jet was to be the basis of the tanker fleet - in Britain alone 11'000 jobs will be lost if the contract goes to Boeing in the rebidding process. Airbus had entered into an alliance with the US company Northrop Grumman to handle about half the work; Boeing say 75 per cent of their tankers would be made in the US. At stake is not only a valuable contract promising thousands of jobs; of equal long-term importance is whether substantial US military contracts will ever be awarded to non-US companies - the tanker deal had appeared to be a major breakthrough on this issue. In an election year in the US it will be surprising if Boeing does not prove to be the ultimate winner.


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