Northrop Grumman Corp. won a U.S. Air Force program valued at as much as $35 billion to build 179 aerial refueling tankers with partner European Aeronautic Defence & Space Co. in a surprise decision that breaks Boeing Co.'s half-century hold on the business.Can we now build the Visby, Nansen, or something?
Northrop, based in Los Angeles, and its team won an initial contract of $1.5 billion for development and design of four test aircraft and five options valued at $10.6 billion to build 64 aircraft, the Air Force said in a statement today. Boeing was the unanimous pick to win in a Bloomberg News analyst survey this month.
The new aircraft, to be named the KC-45A, will replace Boeing-built KC-135 tankers flown by the Air Force since 1956. If all contract options are fully funded, the tanker program would become the largest Pentagon project since 2001 when Lockheed Martin Corp. was chosen to build the Joint Strike Fighter.
``This was definitely a surprise win,'' said Peter Arment, an analyst with Greenwich, Connecticut-based American Technology Research, who has a ``sell'' rating on Boeing stock. ``Northrop had a plane with more capability for cargo and fuel capacity and those capabilities made it very compelling. The Air Force decided that was the direction they wanted to go in.''
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The two bidders took different approaches to the contest, with Northrop and EADS offering a larger plane to carry more fuel, cargo or passengers, and Boeing offering an aircraft closer in size to the current fleet.
Northrop's 192-foot-long KC-30 carries 250,000 pounds of fuel, 24 percent more than the 202,000 pounds that Boeing's 159- foot KC-767 can haul. The current tanker is 136 feet long and carries 200,000 pounds of fuel.
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