777 to be Boeing's alternative proposal for tanker

At an Air Force Association conference today in Washington, D.C., Boeing will make public for the first time a proposed U.S. Air Force refueling tanker based on its very large 777 commercial passenger jet — a potential alternative to a midsize 767 tanker.

According to a draft request for proposal (RFP) the Air Force issued Monday, the government requires a tanker that can double as a troop carrier and supply plane.

The proposed 777 tanker would have a much larger capacity for fuel, troops or cargo than either the currently offered 767 tanker or a rival offer based on the Airbus A330.

Boeing said a 777 tanker would have a maximum fuel capacity of "more than 350,000 pounds," though a company source indicated it could stretch to more than 400,000 pounds of fuel. The Airbus tanker has a maximum fuel capacity of 250,000 pounds.

Boeing tanker spokesman Bill Barksdale said unveiling the 777 option is intended to convince observers the company is serious about providing an alternative to the original 767 tanker if the Air Force wants a bigger airplane.

But Barksdale said Boeing doesn't yet have a preference, despite having already sunk about $1 billion into developing the 767 variant.

"We haven't picked a platform," Barksdale said. "We are taking our time with this. We want to make sure we understand what [the Air Force] wants."

The contract to supply the Air Force with hundreds of next-generation air tankers, plus likely follow-on orders from foreign air forces, could be worth $100 billion over 30 years, according to a 2002 Boeing estimate. The Air Force hasn't said how many planes it intends to buy.

A 777 tanker would cost more per airplane, but the Air Force wouldn't need as many.

Boeing is expected to decide by spring which plane to offer. The Air Force said it intends to award the contract next summer.

In 2001, Boeing won a contract to lease modified 767 tankers to the Air Force. But the Pentagon canceled that deal after a former senior Air Force procurement officer, Darleen Druyun, admitted favoring Boeing in contracts before being hired by the company. Druyun was convicted and served prison time.

To win the tanker contract anew, Boeing is in fierce competition against the A330 tanker, offered by Airbus parent European Aeronautic, Defence & Space (EADS) in a joint venture with U.S. defense contractor Northrop Grumman.

Boeing already has sold 767 air tankers to Japan and Italy. The Italian Air Force model is now in flight test.

But Boeing was forced to bring a larger airplane to the table when the Airbus A330 was offered.

If the Northrop/EADS team wins the contest, the European company is committed to building a plant in Mobile, Ala., both to assemble the A330s and to modify them into tankers.

Establishing a manufacturing presence in the United States and winning such a big Pentagon contract would be a major breakthrough for EADS into the world's largest defense market.

Northrop Grumman tanker spokesman Tim Paynter said the A330 hits a sweet spot in the U.S. military's size requirements, in both air-refueling capacity and its other roles in carrying troops and supplies.

"We feel it truly meets all the needs of the Air Force," said Paynter.

EADS won at least a temporary victory when the draft RFP released Monday omitted language requiring the two bidders to identify any cost or impact that might result from a World Trade Organization dispute over aircraft subsidies. The draft instead asked bidders for comment as to whether such a requirement should be included in the final RFP.

Northrop and EADS viewed an earlier suggestion to disclose subsidies as an attempt to favor Boeing because of U.S. concern over alleged Airbus subsidies. Some senators, including John McCain, R-Ariz., echoed that concern.

"Northrop Grumman is interested in bidding on this program only in a fair and open competition," Northrop spokesman Randy Belote said in an e-mailed statement.

"The injection of any issue into this competition that favors one of the bidders over the others is inconsistent with these assurances and does not represent fair and open competition," he said.

If Boeing wins the tanker competition, be it with a 777 or a 767, the basic airplane will be produced in Everett.

Barksdale said it is uncertain where Boeing would do the military modifications. "You could [modify] them in lots of places," he said. "It's still to be determined."

The tanker decision will have a major impact on the future shape of the Everett plant, where all Boeing jet assembly could eventually be consolidated, including both the 787 and potentially the replacement for the 737 single-aisle jet.

The 767 assembly line in Everett is building just one jet a month to stretch out production until a tanker decision is made, with 27 unfilled orders providing just over two years of remaining work.

Bloomberg News contributed to this report. Dominic Gates: 206-464-2963 or dgates@seattletimes.com