Giants fight for tanker deal

Jun. 24--PARIS -- Boeing and Airbus, as is usually the case, dominated much of the news at last week's Paris Air Show, touting big orders for new jetliners and taking pot shots at each other's products and business strategies.

Now there's a new chapter in the ongoing high-profile trans-Atlantic feuding between the two aerospace giants, each of which bears to some degree the national pride of its home country.

Later this year, the Air Force is expected to make a $30 billion-plus decision to buy a fleet of new aircraft that will serve as a next generation of aerial refueling tankers to replace the half-century-old Boeing-built KC-135s.

The matchup pits Boeing against a team that comprises Northrop Grumman, Airbus and its parent company, European Aeronautic Defense & Space Co.

In an example of the marquee-lights importance of this contest, the Northrop/Airbus/EADS team ran a full-page advertisement touting its tanker in the Friday edition of the International Herald Tribune newspaper.

Boeing wants to sell the Air Force a much-modified version of its 767 jetliner, a late 1970s design that is sold primarily in a freighter version.

If Boeing wins, one of the beneficiaries would be Dallas-based Vought Aircraft Industries, which produces much of the 767 tail assembly at its Marshall Street plant in Grand Prairie.

EADS/Airbus teamed with Northrop Grumman for its technical expertise and, more importantly, Pentagon access. Their offering would be a plane based on the Airbus A330 jetliner, a larger and newer design than the Boeing jet.

Many outside observers say that it is unlikely the Air force will opt to buy the Airbus plane, for military and technical reasons.

"The Air Force has felt from the beginning that the 767 is ideally sized for the tanker," said Loren Thompson, a defense consultant and chief operating officer of the Lexington Institute national-security issues think tank.

In dueling news conferences and one-on-one briefings with reporters last week, each team touted its strengths and subtly highlighted the competition's perceived shortcomings.

The short arguments go something like this:

Boeing: Proven experience as the primary supplier of aerial tankers to the U.S. for half a century. A proven, durable and economical aircraft in the 767, allowing the Air Force to buy more planes for less money.

War experience, Boeing officials say, has shown that what's important is the more tankers, the more planes that can be refueled, bringing more airpower to the fight faster.

Northrop/Airbus: Bigger, newer plane capable of hauling more fuel farther, carrying more troops or cargo when needed and providing the Air Force with more total airlift capability.

But this competition is overshadowed by issues that have little to do with technical arguments.

The Boeing entry is dogged by its history. Post 9-11, with airlines canceling new aircraft orders like they were radioactive, Boeing and the Washington-state political delegation pitched the Air Force a proposal to buy new 767 tankers.

The Air Force brass wasn't very interested and didn't want to spend their precious budget buying tankers when what they really wanted was hundreds of F-22 fighters. So Boeing and its political allies proposed leasing the aircraft to the Air Force, that way the generals could have fighters and tankers, too.

After numerous studies and proposal rewrites, the Pentagon agreed to a 100-plane lease deal in May 2003. But shortly afterward, a scandal broke that revealed that a senior Air Force official had approved the plan in exchange for a job for her daughter and other considerations. Congress, notably Sen. John McCain, R-Ariz., complained, and the leasing deal died.

By then the Air Force was fighting wars in Afghanistan and Iraq and putting a lot of extra hours on its aging tanker fleet. The Air Force warmed to the idea of buying new Boeing tankers, but EADS/Airbus and members of Congress warned repeatedly that they wanted an open and fair competition.