By Graham Warwick in Washington DC
Air force seeks assurances over fall-out from WTO spat

The World Trade Organisation (WTO) dispute between the USA and Europe over government subsidies for Airbus and Boeing raises its head in the eagerly awaited US Air Force request for information (RFI) on the KC-X tanker replacement programme.

Released on 25 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 WTO dispute – might affect the KC-X life-cycle costs.

In addition to information on new and used commercial-derivative tanker aircraft, the USAF is seeking input on fee-for-service refuelling support and on upgrades to keep its Boeing KC-135 fleet flying until it can be replaced by the KC-X.

As expected, the USAF wants information on medium and/or large tankers with maximum take-off weights between 136t and 454t – which includes the Airbus A330 and A340 and Boeing 767 and 787 – and the ability to carry cargo and passengers.

Responses are due by 9 June, with a final request for proposals expected in January next year, leading to contract award in the third quarter of 2007. While their principal offerings are the KC-767 and A330-based KC-30, respectively, Boeing and Northrop Grumman say they will offer the aircraft that “best fits” the requirements.

With Airbus and Boeing embroiled in a trade dispute over subsidies, the RFI pointedly asks bidders to identify “business arrangements that involve a financial contribution from government”, including launch aid; grants for manufacturing sites; soft loans, forgiven debts and equity infusions; and research and development funds. Examples would include state and local incentives offered to Northrop and EADS North America to locate the KC-30 final assembly site in Mobile, Alabama.

Bidders are asked to quantify how any change in those business arrangements, including retaliatory duties that may be imposed on the eventual loser in the WTO dispute, could affect KC-X costs.

n Airbus has conducted initial validation flight tests of the Royal Australian Air Force’s first of four A330-200s to be delivered from 2008 reconfigured as multi-role tanker transports.

Source: Flight International