Boeing welcomes proposed US Bill on $35 billion tanker contract

Boeing has welcomed proposed US legislation that would force the Pentagon to factor in subsidies to Airbus when it makes a decision on a $35 billion tanker contract.

The American giant is locked in a fierce battle with European rival Airbus for the deal to supply new aerial refuelling tankers to the US Air Force, with both sides trading accusations of unfair competition.

Dennis Muilenburg, the president and chief executive officer of Boeing Defence, Space and Security, said the company thinks "it's very important on the global scale that we have a fair and level playing field".

Speaking to reporters in Singapore where he was attending a security forum, Mr Muilenburg referred to a ruling by the World Trade Oganisation that Airbus had received "illegal subsidies" from European governments.

US lawmakers last month proposed a Bill that would require the Department of Defence to consider WTO decisions as part of military acquisitions.

Supporters have said the Bill would require the Pentagon to add $5 billion to the cost of the Airbus bid for the contract.

"The legislation as you see is intended to address the fact that right now we don't have a level playing field," he said.

"Boeing is very interested in competing, we are very willing to compete in the global marketplace but we also want to compete on a fair and level playing field."

The legislation has drawn fire from the European Aeronautic Defence and Space Co, the parent of France-base aircraft maker Airbus.

"The Boeing Bill is one more attempt to avoid competing on the merits of the tanker," Guy Hicks, spokesman for the EADS unit, said in a statement last month, alleging Boeing did not have a tanker that met contract requirements.

But Mr Muilenburg said that Boeing has been "building and delivering" tankers for the past 50 to 60 years and was now "in the final stages of preparing" its proposals for the latest US contract.

The Pentagon expects to make a decision in the autumn. The process has been dragging on since 2003.

EADS rejoined the bidding in April for the contract to supply the US Air Force with 179 aerial refuelling tankers.

The European company and its former US partner, Northrop Grumman, had earlier dropped out of the process, complaining the Pentagon had skewed the contract terms to favour Boeing.

Proposals from each firm are due by July 9 to replace an ageing fleet of Boeing KC-135 Stratotankers that date back to the 1950s.

In March, the WTO issued a confidential ruling on US allegations that European governments had illegally subsidised Airbus, part of a long-running subsidies battle between the United States and the European Union.