Boeing may offer 777 tanker in new contract bid

Boeing Co. may offer a tanker version of its 777 jet in a new bid to win a $35 billion military contract to replace the Air Force's aging fleet of aerial refueling planes, a company spokesman said Wednesday.

Chicago-based Boeing and a team comprising rival Airbus' parent company, European Aeronautics Defense and Space Co., and Northrop Grumman Corp. are girding for a new round of competition for the contract to build 179 planes.

Defense Secretary Robert Gates canceled earlier bidding in September after the Government Accountability Office concluded the Air Force had unfairly penalized Boeing's smaller plane. Gates plans to restart the troubled process in the coming weeks.

Boeing spokesman William Barksdale said Wednesday the company may offer a tanker version of its popular 777 commercial jet along with the 767 it offered previously. The Northrop team's plane was based on Airbus' A330 passenger jet frame.

"It definitely is much more capable than the A330," Barksdale said in a telephone interview from Paris, where he is attending the Paris Air Show. "We've spent a lot of time not only listening to what the Air Force said to us, but also doing trade studies on what a bigger tanker would look like," he said. "If we need to offer a big tanker, then we're going to be ready to do that."

The 777 tanker would be virtually the same size as the A330, but would carry 23 percent more fuel, 44 percent more cargo and 42 percent more passengers than the competing plane, Barksdale said.

If the Air Force does not want "a big, huge tanker," it could choose the 767, which remains a capable, agile widebody aircraft, he added. "We're just going to give that customer a lot to choose from."

A key technology developed for the 767 - a boom or tube that extends from under the plane's tail to refuel other jets in mid-air - can be transferred to the 777, Barksdale said.

"The challenge is going to be making sure we understand the requirements and matching up based on costs and schedule," he said.

Boeing and Airbus have been struggling with slumping orders for their planes as demand for air travel sags amid the recession. The company has announced plans to cut monthly 777 production to five planes from seven starting in June next year and delay plans to boost production of its 747-8 and 767 planes. Airlines began flying the twin-aisle 777 in 1995.

Dave Bowman, Boeing's head of tanker programs, disclosed Boeing's 777 tanker plan at a press briefing Tuesday in Paris.

Earlier this week, Ralph Crosby, CEO of EADS North America, said he was confident about the EADS-Northrop team's chances. "We're going to win," he said. "We won once, hey, the fundamentals haven't changed."

Boeing shares lost 28 cents to close at $48.55.