Boeing set to win US air tanker deal after Northrop pulls out

The US manufacturer has taken a lead over rivals after EADS' partner in the bid Northrop Grumman pulled out, and EADS stated it would not bid alone.

The contract is said to be worth $40 billion, with $100 possible over the length of the contract.

Meanwhile EADS, who also manufacturer Airbuses in competition with Boeing's airplanes, said that they had fallen to a £752 million euro loss from its superjumbo A380 project and A400M (military transport).

The company told shareholders last week that it would be forced to take a hit of 1.8 bn euros on the new A400 project, whilst its superjumbo is expected to 'weigh heavily' for a number of years.

Boeing on the other hand will bolster its position as number one in the aerospace and defence sector, after posting full year operating margins of 9.4 percent, compared with EADS' -2 percent margins posted today.

Boeing also has the advantage of being 'lightweight' with operating cash flows increased, while its commercial order book remains unhampered by any loss-making planes - it's 777 continues to be profitable.

Meanwhile orders for the 'Dreamliner' 787 are strong (851) with its delivery expected 4Q 2010, along with the 747-8.

Boeing's share price is up around 50 cents in premarketing trading whilst EADS is down 0.73 euros in Paris.

Britain also, is expected to lose £4.6 billion from the loss of the EADS deal as the UK's Airbus staff will not need to be increased at the Broughton factory where EADS operates.

Agreements reached last Friday, saw EADS receive a further billion euros, at a cost of £220m to the UK in order to continue A400M development, which it says has reached a loss of 4.1 billion euros before even a single plane is built.

The 3.5 billion euros given to them by european governments, Britain, Belgium, France, Germany, Luxembourg, Spain and Turkey, includes

a 1.5 billion Euro loan, and 2 billion payment.

Questions however still remain over the nature of the loan, and whether it is 'repayable' as in the past, as Airbus has often received loans from governments in the past that it did not have to repay.

Ministers working on it, had remained divided on the issue of the loans until late last month.

However, recent reports indicate that EADS will not need to 'repay' if it makes a certain number of export sales which it can then share with the governments involved in building it.