BEags had you seen this?????
( PS I worked for Reuters for 24 years, so I believe what they say !!!!)
Reuters Article 15/16/1/04
RPT-UK tanker deal key to next Boeing-Airbus battle
Fri 16 January, 2004 06:04
(Repeats story issued on Thursday, January 15)
By Jason Neely, European Aerospace & Airlines Correspondent
LONDON, Jan 15 (Reuters) - Boeing Co BA.N , which lost its commercial jets crown to European rival Airbus on Thursday, also risks its near monopoly in military refuelling planes if it loses an imminent British order.
The 13-billion-pound ($23.75 billion) contract would be Europe's biggest tanker deal and is expected to be awarded as early as next week, industry officials say.
Analysts argue a Boeing win would freeze Airbus parent EADS EAD.PA out of a global air tanker market key to the European firm's drive to boost defence revenues.
"(This) is critical to the global ambitions for Airbus as a tanker supplier," said Merrill Lynch analyst Charles Armitage in a research note.
Boeing won an $18 billion order for 100 tankers from the U.S. Air Force but the Pentagon has put it on hold pending a probe of possible ethics violations at Boeing which sparked the departure of its chief executive last month.
AIRBUS TIPPED TO WIN?
The UK is weighing bids from two consortia offering to own and maintain a fleet of about 20 air tankers to be used by the Royal Air Force beginning in 2008.
Some UK-based analysts believe a consortium led by EADS that includes Britain's Rolls-Royce RR.L and Cobham COB.L and France's Thales TCFP.PA is likely to win as the government weighs capability, cost and jobs.
Other analysts say it is too close to call.
The EADS-led group has promised to create more jobs, including those from building wings in Britain for the A330 model it is offering.
The Boeing consortium includes Boeing, Britain's BAE Systems BA.L and Serco Group SRP.L with 31.67 percent each and Spectrum Capital as a minor partner. It has offered used Boeing 767s from British Airways BAY.L .
"(They) look very likely to us to lose," Goldman Sachs analyst Sash Tusa said in a research note citing a UK White Paper on defence published last month.
"The White Paper repeatedly highlights the need for range and overflight capability that would greatly favour the A330 over the Boeing 767," Tusa wrote.
He said one consolation prize for Boeing might be orders from Britain for Boeing C-17 large transport planes instead.
Merrill's Armitage also expects an Airbus win.
FURTHER ORDERS
Sources close to the deal told Reuters no decision has been made but acknowledge the Ministry of Defence is close to one and seeking support needed from the Treasury and other ministries.
They expect a preferred bidder to be announced in the next week or so and a final contract signed by about November.
The contract will be spread out over 27 years and split revenues among consortium partners, so analysts expect little share price turbulence for either Boeing or EADS.
But they acknowledge its strategic importance -- Britain has Europe's largest tanker fleet and worked in tandem with U.S. forces in operations in Iraq and Afghanistan.
Analysts see its choice as pivotal if Airbus, which is building its first tankers for Germany and Canada, hopes to win over France and other potential buyers.
"We estimate that winning...will allow Airbus access to a potential 105 further tankers," Armitage said.
The biggest prize, however, would be a slice of the U.S. fleet of more than 500 ageing air tankers facing replacement.
EADS makes about six billion euros or 20 percent of its annual revenues from defence and has ambitious plans for boosting that to 10 billion next year.
Airbus reported 305 commercial deliveries for 2003 on Thursday to top Boeing for the first time. Boeing delivered 281 jets last year.