Battle hots up for defence deal

ONE of two bidders for a £13 billion Ministry of Defence deal to provide in-flight refuelling for RAF planes has revamped its plans to challenge its Boeing-based rival.

Airbus's major shareholder EADS, defence contractor Cobham, Rolls-Royce and the British arm of France's Thales are to take on a consortium of BAe Systems, Boeing, Private Finance Initiative specialists Serco and Spectrum Capital.

The groups are battling to secure a deal to provide in-flight refuelling for RAF planes over almost three decades. Originally, the EADS consortium, named AirTanker, planned to buy a fleet of new Airbus 330-200s for the contract.

But now, AirTanker has decided to use some second-hand aircraft, though the majority would still be built specifically for the job.

The rival bid, Tanker & Transport Service Company ( TTSC), would convert several secondhand Boeings 767s from the British Airways-fleet. The MoD needs to replace its current fleet of ageing VC-10s and Tristars.

It hopes to announce the winner of the new contract, due to start in 2008, by the end of this year.