EADS says won't bid for Air Force One replacement

WASHINGTON Wed Jan 28, 2009 1:00am EST

WASHINGTON Jan 28 (Reuters) - The North American unit of Europe's EADS EAD.PA said on Wednesday it will not bid in a U.S. competition for new presidential aircraft, although it will continue to fight for a big order of refueling planes.

EADS North America provided technical information about several Airbus wide-body commercial aircraft to the U.S. Air Force in 2007 when it was conducting an analysis of alternatives for the competition, said spokesman Guy Hicks.

But the company ultimately decided that participating in the competition would not advance its goal to invest in the United States and create high-technology jobs, Hicks said.

"After careful review, we've determined that participation in the AF-1 program will not help us meet these business objectives," he said.

The Air Force this month began searching for a replacement for Air Force One, the Boeing 747 that transports the president, with an eye to fielding a fleet of three new jumbo jets in 2017. The Air Force currently has two 747s.

Given the small size of the expected order, EADS apparently decided it would not be worth partnering with another company to bid for the presidential aircraft, or to move a significant portion of its production to the United States.

Hicks said EADS continue to work with Northrop Grumman Corp (NOC.N) on a bid to build new mid-air refueling aircraft for the Air Force.

Northrop and EADS beat out Boeing Co (BA.N) to win the $35 billion competition last February, but the Pentagon later decided to start over after government auditors found problems with the initial competition.

Defense Secretary Robert Gates said on Tuesday he hoped to issue a new request for proposals in the tanker competition in early spring, followed by a contract award in early 2010.

EADS is also supplying light utility helicopters to the U.S. Army.

"We reiterate our strong commitment to the U.S. Department of Defense and to supporting the warfighter with our products and services," Hicks said.

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