Northrop Grumman/EADS wins $40 Billion USAF Tanker Deal!

The United States Air Force announced last night that the Northrop Grumman/EADS partnership's Airbus 330-based tanker won a $40 Billion contract to supply 179 tanker aircraft, with options for hundreds more. Boeing, whose 767-based entrant lost is outraged.

A detailed Reuters article mentions that politicians from Seattle and Kansas, states with a large Boeing presence, are threatening to request a formal review of the decision. The Seattle Times mentioned that since Boeing has no new orders for the 767, losing this contract means that the 767 production line will be shut down in 2012 after all current orders are finished. These complaints come in spite of a plea from the USAF Chief of Staff, General Moseley, that the (then unannounced) loser of the competition not delay production of the new tankers with appeals and second-guessing.

I understand Boeing's disappointment. A US aircraft lost a US defense contract to a French aircraft. However, the company makes 50% more in a single year than this contract was worth. Their 777 is the star of the long-haul business, their 737 is the superstar of the discount airline market and many airlines can't wait to get a hold of their upcoming 787 that is supposed to have revolutionary efficiency. They also manage contracts for numerous other US aircraft, including all of our bombers.

As the Seattle Times mentioned, the USAF acquisitions chief Sue Payton is standing firm and had no qualms about stating that this decision was based on the needs of the Air Force rather than on workers or states losing jobs. While I hate the idea of Americans having to find new jobs, I'm glad they tried to base this decision on saving lives rather than politics.

In the meantime, politicians from Alabama are ecstatic since a new plant where some of the work on this tanker will be done will be built in their state. That facility is supposed to produce more new jobs than will be lost at Boeing.

I had the opportunity to ask a former KC-135 pilot about the announcement last night. He has been rooting for the Northrop/EADS entrant all along because it performs better in just about every area. The enlisted boom operators he served with (the ones who do all the work on a tanker) liked the Airbus better as well. I'm sure that there are mixed opinions throughout Air Mobility Command, but if a 1500+ hour AF instructor pilot with numerous combat deployments in our current conflicts likes this decision, I'm inclined to support it as well.

Keep checking back for updates on this situation.