Business

EADS submits new bid for USAF refuelling contract

Pentagon
Image caption The Pentagon contract is worth a massive $35bn

The European defence contractor, EADS, has submitted a new bid to supply refuelling aircraft for the US Air Force.

Arch-rival Boeing's bid is expected to be delivered to the Pentagon soon.

The contract, which has been long delayed, is worth $35bn (£23bn).

Earlier, a long-running World Trade Organisation (WTO) investigation into whether Boeing receives illegal subsidies from the US government postponed its decision on the matter.

Both the US and the European Union have reported each other's companies to the WTO, alleging illegal subsidies.

The WTO has already ruled - at the end of June - that the EU had paid illegal subsidies to the EADS subsidiary, Airbus.

The EU and Airbus criticised the delay over the Boeing decision.

"The time lag between this case, and the United States case against support to Airbus... has constantly increased over the six years this dispute has been running and the gap is now at nearly a year," the EU's executive Commission said.

Political decision

Meanwhile, EADS is hoping that the US will find something to please within the pages of its 8,000 page-plus proposal for the defence contract, which it has submitted a day ahead of deadline.

The US hopes to have chosen a winner by November.

It is replacing its current fleet of tankers, some of which date back to the late-1950s.

Several previous attempts to choose a contractor have failed - one because of a dispute between Boeing and its then-rival Northrop Grumman.

The decision is highly political.

Although EADS plans to build its craft within the US, it is seen as very much a European business.

Boeing's supporters in Congress argue the recent WTO ruling shows EADS has an unfair advantage over Boeing.

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