EADS seeks partner to bid for USAF air tanker deal

The European Aeronautic Defence and Space Co (EADS) plans to bid for the $35-billion contract to build the next generation of US Air Force refuelling tankers, Ralph Crosby, the chairman of EADS North America, said yesterday. However, after announcing that it would put in a solo bid, the European aerospace giant seemed to backtrack today, with chief executive Louis Gallois saying the company is still in talks to find a partner to support its bid for a deal.

''It is indispensable to have a partner," Gallois said at a news briefing in Paris.

EADS will compete with US aerospace giant Boeing for the lucrative contract to build the first 179 aerial refuellers in what the Pentagon hopes will mark the beginning of the end of the long-running and controversial saga to replace its aging fleet of KC-135s.

EADS and US partner Northrop Grumman abandoned their planned bid for the deal last month saying the process was biased against them. They had argued that the terms of the tender favoured US group Boeing. EADS re-entered the race after the US government extended the bid deadline. It has until 10 May to make a bid.

Gallois said EADS did not share Northrop's "too pessimistic" view but said price would be a "decisive element" in the race. Gallois, who has led calls by European exporters for action on currency imbalances, also said he was concerned about the level of the dollar, which was still "weak" at 1.35 to the euro.

The EU has pledged to watch the tendering process very carefully, with Brussels having earlier said it would be "extremely concerned" if EADS was prevented from fairly bidding for a major US defence deal.