Airbus says Boeing tanker too costly

  • Bryan Corliss / Herald Writer
  • Wednesday, January 23, 2002 9:00pm
  • Business

By Bryan Corliss

Herald Writer

Airbus Industrie officials say they can cut the U. S. Air Force a better deal on aerial refueling tankers than the one it’s getting from Boeing based on the 767.

The assertion has captured the attention of U.S. Air Force officials, who say they’ll listen to an Airbus pitch — but only if they’re unable to strike the deal Congress authorized with Boeing.

But Airbus doesn’t have a tanker to offer, Boeing officials counter. And a congressional source said the Air Force likely only is interested in using the Airbus bid as a bargaining chip in the upcoming lease contract discussions.

"Airbus doesn’t have a proposal. They don’t have a tanker aircraft," said the source, who spoke on the condition he not be identified. "There’s just no ‘there’ there."

What is there, on the surface, is an exchange of letters.

Two weeks ago, Gregory Bradford, president of the European Aeronautic Defense and Space Co., which owns 80 percent of Airbus, wrote a letter to the editor of The Washington Post blasting the cost of the no-bid program that would allow the Air Force to acquire up to 100 767s on 10-year leases.

The $20 billion price tag is "extraordinarily excessive," Bradford wrote. "Our internal cost-benefit analysis shows that through competition, the taxpayer could save up to 40 percent of the $20 billion program. That’s a savings of $8 billion."

Air Force Secretary James Roche has told reporters that Boeing’s tanker deal is not a done deal. In December, he and the Air Force chief of staff wrote that they plan a thorough review of the lease plan, and "if a cost-benefit analyst favors another approach, we will pursue another approach, we will pursue that alternative."

Roche told reporters last week at a breakfast for defense industry writers that the Air Force "will consider them (Airbus) if it helps us get a better deal at the end of the day," trade publication Defense Daily reported.

However, Airbus has not yet made a tanker proposal, Air Force spokeswoman Gloria Cales said Wednesday. The only thing Air Force officials have seen in writing is the letter to The Washington Post, she said.

The language authorizing the deal does not require the Air Force to do it, she noted. But it does specify Boeing 767s, she added.

That was clearly the intent, said Todd Webber, spokesman for U.S. Sen. Patty Murray, D-Wash., one of the architects of the lease deal. "The senator doesn’t think the U.S. Air Force should be flying French-built planes," he said.

Although Airbus does not have an aerial tanker to offer the Air Force, it does have a contract with Lockheed Martin to develop a tanker based on the A330 commercial jet, which is slightly larger than the 767s.

On Wednesday, Boeing officials said they hope to have a contract signed with the Air Force by summer. If the Air Force bargains too hard, there could come a point where Boeing would walk away from the deal, Boeing Chairman Phil Condit said.

But that’s not likely, added chief financial officer Mike Sears. "We’re going to spend the next three to six months putting together a program that makes good sense to the customer and good sense to the company," he said.

Condit said: "We have a product that is significantly better. We have immeasurably more experience in tankers. They have none of that. They can talk all they want. We have the best product."

You can call Herald Writer Bryan Corliss at 425-339-3454

or send e-mail to corliss@heraldnet.com.

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