Airbus Hopes To Land Big U.S. Tanker Contract, Lower Supply Costs

Excerpt from our One Page Annotated Wall Street Journal Summary:

U.S. Aims to Extend Aerial-Tanker Competition and Airbus Opens Overhaul By Looking at Procurement

Summary: The U.S. Air Force hopes to postpone until 2009 its decision between Boeing (BA) and a Northrop Grumman/EADS team for supplying a $20 billion next-generation aerial tanker contract. EADS (European Aeronautic Defence & Space), 80% owner of Airbus, has recently aimed to gain more U.S. defense contracts, and its A330 widebody in modified form is a leading candidate for this program. "The program has been watched closely because revelations of favoritism toward Boeing thwarted the Air Force's last attempt to replace its aerial tankers." In a related story, Airbus plans to overhaul its procurement practices in an effort to stem problems that have emerged in two major jetliner programs -- the A350 and superjumbo A380. Among other changes, Airbus will trim its supplier base, ask suppliers to design and produce some complex sections, and price contracts in dollars to lessen the impact of currency fluctuations. Full WSJ article >
Related links: Boeing is Set for Takeoff • Defense Aircraft and Parts Showing Potential • Spade Defense Index -- The NASDAQ of This Decade? Conference call transcripts: Boeing 2Q06 • Boeing 1Q06

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