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Northrop/EADS plead: ‘Keep WTO out of USAF tankers’

By Graham Warwick in Washington DC

Northrop Grumman and EADS North America have called on the US Air Force to exclude the issue of subsidies for Airbus and Boeing from its forthcoming competition for replacement aerial-refuelling tankers. The plea came as responses were submitted to the USAF’s KC-X replacement tanker request for information (RFI).

The RFI drew known responses from Boeing, Northrop/EADS and Omega Air, which is offering contracted aerial refuelling services with a fleet of modified McDonnell Douglas DC-10s. A request for proposals (RFP) is expected in January next year, leading to contract award in the third quarter of 2007.

Offering the Airbus A330-based KC-30 tanker, the Northrop/EADS team argues that the current World Trade Organisation (WTO) subsidies dispute is a government-to-government matter, and including the issue in the RFP and acquisition process “would be unprecedented”.

Issued in April, the RFI requires potential bidders to identify and quantify how any government financial support, including subsidies – and retaliatory duties that could result from the dispute – might affect KC-X life-cycle costs. Northrop says that, “with the exception of cost-mitigating manufacturing-site assistance” offered by Alabama, the team does “not intend to seek any financial support”. If selected, the KC-30 would be assembled in Mobile, Alabama.

The RFI also sought information on fee-for-service refuelling support, and Omega Air has submitted a proposal to convert and operate up to 60 DC-10 tanker/transports – 20 of them in the first three and a half years. The Irish-owned US company has already flown more than 6,000h of contracted refuelling services for the US Navy using a modified Boeing 707.

Arguing it will take the US Air Force years to replace its Boeing KC-135s at the expected 15-a-year KC-X procurement rate, Omega is proposing an interim refuelling service. The company would cover the cost of converting the DC-10s in return for a contract to provide refuelling and cargo services for a minimum of 10 years.

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