Defence

The UK's slow-moving Future Strategic Tanker Aircraft (FSTA) programme is expected to this week take a further step towards a contract award, with the UK Ministry of Defence expected to confirm the EADS-led AirTanker consortium as preferred bidder to deliver the service under a private finance initiative (PFI) deal.

If confirmed as expected on 28 February, the move will clear the way for a "main gate" decision to award AirTanker a contract to replace the Royal Air Force's Lockheed TriStar and Vickers VC10 tanker/transport fleets. The company was shortlisted in January 2004 to meet the FSTA requirement, but more than 13 months on, a deal is believed to be some months away.

It is unclear whether a targeted "main gate" decision in September 2005 identified by the UK's National Audit Office is attainable, or if AirTanker will deliver first services in 2009as previously planned. The projected 27-year PFI will be valued at around £13 billion ($24.6 billion).

* The UK is to expand the terms for its operating lease of fourC-17 transports under an $18 million contract modification with Boeing. The Royal Air Force'sC-17 fleet recently passed 20,000 flight hours in less than four years against an expected annual usage of just 3,000h. Boeing will provide support services for operations up to a surge rate of 9,000h per year.