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Boeing takes a dive on tanker news

Post by John Gillie / The News Tribune on Feb. 29, 2008 at 2:02 pm with No Comments »
February 29, 2008 2:02 pm

Boeing Co. shares were down $3.40 or 4.11 percent in afterhours trading on leaked news that Boeing has lost perhaps the biggest military contract of the decade, the deal for new Air Force tankers.

A combine of Europe-fased EADS and U.S.-based Northrop Grumann reportedly won the $40 billion contract for 179 aircraft.

EADS had offered a militarized version of its A330 commercial airliner made by its subsidiary, Airbus. Boeing had offered a version of its 767 airliner.

Ultimately, the value of the contract could exceed $100 billion as the Air Force replaces more of the 535 tankers it has in inventory now. The average age of those tankers is 44.

The market had been anticipating Boeing winning the contract for 179 tankers worth $40 billion, so those who had bet on U.S. planemaker were quickly bailing out of company’s stock.

Northrop Grumman and EADS had promised to do the final assembly of the new tanker at a new plant in Mobile, Ala. Airbus had promised to assemble its A330 freighters in Alabama should it get the tanker contract.

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