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CLARIFICATION OF U.S.A.F. TANKER DEAL

5 Apr 02. The Times reported yesterday that Boeing had won a $20bn 100 aircraft refuelling deal for the U.S.A.F. BATTLESPACE has contacted Boeing for clarification of this story and publishes below the response from Boeing and the Congressional report which gives the true status of this contract.

The U.S. Air Force reviewed responses from both Boeing and EADS to a request for information on tanker aircraft. Boeing is now continuing negotiations with the Air Force, as directed by Congress and signed by the President late last year. The company expect to have those negotiations completed sometime this summer.

The statement below is that provided by the U.S. Air Force to Congress regarding their decision last week.

The results of the Air Refueling Tanker Request For Information (RFI) have clearly demonstrated that only the Boeing Corporation can currently meet the requirements of Section 8159 of the FY02 Appropriations Act. Therefore, the Commercial Derivative Air Refueling Aircraft (CDARA) team will proceed to negotiate a lease with Boeing and develop a business case. The results will be reported back to Congress in the summer of 2002.

The CDARA team concluded its analysis on the results of the Boeing RFI on air refueling aircraft. The RFIs were specifically released to Boeing and Airbus (EADS) to gauge the available technology to meet our air refueling requirements. This industry input was vital to properly bound and define the business case called for by the 2002 Appropriations Bill and determine if competition was practical.

The overall assessment of the RFI data shows that the EADS offering presents a higher risk technical approach and a less preferred financial arrangement. First, EADS lacks relevant tanker experience and needs to develop an air refueling boom and operator station, making their approach a significantly higher risk. Second, a comparison of the net present values of the aircraft recommended by Boeing and EADS establishes Boeing as the preferred financial option. Third, the size difference of the EADS-proposed KC-330 results in an 81% larger ground footprint compared to the KC-135E it would replace, whereas the Boeing 767 is only 29% larger. The KC-330 increase in size does not bring with it a commeasurate increase in available air refueling offload. Finally, the EADS aircraft would demand a greater infrastructure investment and dramatically limits the aircraft’s ability to operate effectively in worldwide deployment.

Representatives from EADS will receive a detailed debrief on the results of our analysis. The AF encourages EADS to continue their air refueling boom and other tanker developmental efforts in order to ensure a vibrant and fully competitive global defense industrial base well into the future.
(STATEMENT ON TANKER LEASING, 28 March 2002)

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