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SMITHS SELECTED FOR AIR TANKER ROLE

13 Mar 02. The Boeing Company (NYSE: BA – news) has selected Smiths Aerospace to supply the hose-and-drogue refuelling system for its 767 Global Tanker Transport Aircraft. Smiths, through its recent acquisition of Able Corporation, will provide this key system for 767 Tanker Transports that will be acquired by customers around the globe. The Italian Air Force will receive the first of these new tankers in 2005.

“Forming a team of pre-eminent supplier partners has been our priority since we
began our company-funded development program for the 767 Tanker Transport
program five years ago,” said Bob Gower, vice president of Tanker Programs for
Boeing. “The addition of Smiths Aerospace, which has a significant presence
both in the United States and in the United Kingdom, is an important step in
bringing that team together.”

Smiths Aerospace will utilize capabilities from a number of its operations in
the 767 Tanker Transport program: program management and systems/software
engineering in Grand Rapids, Mich.; manufacturing in Clearwater, Fla.;
structural component engineering and manufacturing from its aero structures
business in Southampton, U.K.; and primary hose-and-drogue refuelling components
from Able near Los Angeles, Calif.

Smiths Aerospace already provides the mission control system for the 767 Tanker
Transport.

Boeing estimates that more than 85 percent of the total dollar value of the 767
Tanker Transport program will be with companies within the United States.
The 767 Tanker Transport is competing for a global market estimated at about 500
aircraft over the next 30 years. The market has an estimated value of $100bn.

Boeing has been the leader in air-refuelling aircraft for more than 50 years. The
company has delivered almost 2,000 tanker aircraft, and has developed essential
technologies, such as the “flying boom,” which is the U.S. Air Force preferred
method of in-flight refuelling.

As the “right-sized” aircraft for the air-refuelling mission, the Boeing 767
Tanker Transport delivers the optimal fuel-offload performance and operating
costs for strategic and in-theatre tanker missions. Because company-funded
development has been ongoing over the past five years, Boeing can provide the
most capable, lowest risk tankers to the flight line faster and more affordably
than any other candidate.

These factors led to the selection of the 767 Tanker Transport by Italy and
Japan in head-to-head competitions for new air-refuelling aircraft.

Late last year, Congress granted the U.S. Air Force the authority to negotiate a
lease for up to 100 767 Tankers as the first step in replacing its
Eisenhower-era KC-135 fleet. Negotiations are expected to be complete this
summer. Boeing produced 732 KC-135 tankers for the Air Force between 1957-65;
some 540 are still in service today.

“We are committed to providing the Air Force and the American taxpayer with an
affordable, low-risk, highly capable tanker to address the nation’s vital
air-refuelling mission requirements,” said Gower.

Comment: This win is excellent news for Smiths following its slightly disappointing results and lay offs. This story has similar connotations to the HUMS saga of the 1990’s where Smiths toppled the incumbent, Stewart Hughes to take the MoD HUMS contract and eventually Stewart Hughes! The strength of the Boeing tanker team in the US, Japan and Italy must make them favourite for the UK and Australian contracts, where Cobham is in the EADS team. A loss of the UK contract would be devastating to Cobham from which it would take some time to recover. Should Cobham be in the losing team and with Smiths now providing an alternative does this mean that we should look for a Smiths takeover of Cobham which would make an ideal fit into Smiths which has found expansion of its defence interests limited in the current market.

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