Boeing Loses Tanker Service Deal

By: Wichita Business Journal Email
By: Wichita Business Journal Email

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October 2, 2009

The Boeing Co. said it was “disappointed” that it lost a $3.8 billion contract to rival Northrop Grumman Corp. to provide logistics services for a fleet of aerial refueling tankers.

Chicago-based Boeing builds the KC-10 tankers and currently holds the current service contract for the plane, which is set to expire in January.

It has been providing 24-hour service, seven days a week on the aircraft since 1998, Boeing said.

Boeing can choose to appeal the decision, which the Pentagon announced late Thursday.

“We now need to review the Air Force’s selection decision and process before deciding on our next course of action,” Boeing said in a statement.

Boeing is already competing against Los Angeles-based Northrop and its partner, Airbus parent European Aeronautic Defense and Space Co. for a controversial $35 billion contract to replace the Air Force’s 179 aerial refueling tankers.

The Air Force has tried and failed twice to award a contract to replace the aging fleet, once in 2008 after Boeing appealed the decision and once in 2004 after a Boeing ethics scandal.

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