Boeing wins massive Air Force tanker contract

WASHINGTON – The United States on Thursday awarded Boeing a massive contract to supply aerial refueling tankers to the Air Force, defeating European rival EADS.

The Pentagon announcement capped a nearly 10-year attempt by the Air Force to begin to replace an aging Boeing-built fleet of tankers dating back to the 1950s.

Announcing the first part of contract, the Pentagon said: "The Boeing Co. of Seattle, Washington, was awarded a fixed price incentive firm contract valued at over $3.5 billion for the KC-X engineering and manufacturing development which will deliver 18 aircraft by 2017."

The US aerospace giant, based in Chicago, clinched the deal for the contract, which could eventually grow to involve 179 tanker planes, valued at an estimated $35 billion.

Washington state Senator Patty Murray swiftly welcomed the news as a win for Boeing and a win for the state.

"Today's long-awaited decision by the Pentagon is the right one for our military, our taxpayers and our nation's aerospace workers," Murray said in a statement.

"At a time when our economy is hurting and good-paying aerospace jobs are critical to our recovery, this decision is great news for the skilled workers of Everett and the thousands of suppliers across the country who will help build this critical tanker for our Air Force."

Murray said the decision was consistent with President Barack Obama's call to "out-innovate" the rest of the world.

"This decision is a major victory for the American workers, the American aerospace industry and America?s military."