02 Oct 03. The Ft reported that the battle to win the Ministry of Defence’s largest private finance initiative heated up yesterday with the two consortia competing for the £13bn contract to replace the RAF’s air tankers attacking each other’s offers.

MoD assessors are expected to recommend the winning bid to ministers at the end of this month. The competition effectively pits Airbus against Boeing.Robin Southwell, head of AirTanker, which includes Airbus’s parent EADS and Rolls-Royce, argued that a proposal from TTSC, which
includes Boeing and BAE Systems, to modify second-hand British Airways B767s would run the risk of becoming a repeat of the Nimrod debacle.

TTSC must re-engineer parts of the wings to accommodate refuelling pods. BAE encountered huge problems and had to write-off more than £1bn when it sought to upgrade the Nimrod fleet under a separate contract. But Keith Archer-Jones, managing director of TTSC, said comparing the engineering changes to the more modern 767 to putting new wings on the Nimrod, dating from the 1950s, was an “apples and pears” issue.

TTSC attacked the AirTanker bid on safety grounds. It released a slide entitled “Greater 767 Tanker Airborne Margin of Safety” which, it claimed, showed that aircraft refuelling from the Airbus A330 proposed by AirTanker, must fly considerably closer to the tanker.Mr Southwell attacked TTSC for going against practice by raising the issue of safety. “I am sure that Airbus and Boeing will each deliver safe, competent products, if selected,” he said.

The contract is crucial to both aircraft manufacturers. Boeing dominates the tanker market, which could be worth up to $100bn (£59.5bn) over the next 30 years but a win for AirTanker would effectively allow Airbus to break the stranglehold. The RAF has the second largest refuelling fleet in the world and its seal of approval would give Airbus a huge boost.

Mr Southwell said a win for AirTanker and Airbus would deliver a much bigger boost to the economy. “EADS has made a commitment to make the UK the global centre of excellence for air tanking if we win.” The UK builds all the wings for Airbus aircraft, and Cobham, another member of the consortium, is the world leader in specialist air-to-air refuelling equipment.

Under the PFI programme, the winning team will retain ownership of the aircraft and offer refuelling to the RAF as a service. It will be allowed to earn extra revenues by leasing out reserve aircraft in peacetime to commercial airlines. Senior RAF officers have expressed some disquiet about running the programme as a PFI because 25 per cent of pilots and ground crew will work for the consortium.

Meanwhile in the US, the FT reported that Boeing hopes to more than double the size of its controversial deal with the US Air Force for air-to-air refuelling tankers to more than 200 aircraft.

Robert Gower, Boeing’s vice-president of tanker programmes, on Thursday said such an extension to the $22bn deal for 767 tankers would help keep the production line of the aircraft open until 2017. If that happened it would constitute a turnround for the 767 programme, which looked increasingly under threat as orders from airlines dried up. The initial USAF order for 100 aircraft will secure the future of the product line until 2011 if it is approved. The approval process is bogged down on Capitol Hill after it came under attack from the powerful Senate armed services committee. Republican senator John McCain is leading significant opposition to the deal, branding it a “military-industrial rip-off” intended to save the ailing 767 line.

Comment: The gloves are certainly off in this bid with Robin Southwell taking a no nonsense approach to the bid and trashing the BAE bid in the process. However, BATTLESPACE understands that with the bids in the AirTanker team still has to complete trials of the aircraft sys