The Ghost of KC-X Lingers

Both EADS and Boeing supporters on Capitol Hill continue to make noise about the Air Force's now settled KC-X contest which saw Boeing recently win the $30-$35 billion contract to replace the Air Force's oldest KC-135s with the 767-based KC-46A.

Both EADS and Boeing supporters on Capitol Hill continue to make noise about the Air Force’s now settled KC-X contest which saw Boeing recently win the $30-$35 billion contract to replace the Air Force’s oldest KC-135s with the 767-based KC-46A.

Washington state’ Sen. Maria Cantwell (D) released a statement last night firing a final jab at EADS’ parent company Airbus regarding this week’s final World Trade Organization ruling that rejects much of an EU suit claiming Boeing receives unfair government subsidies:

This final ruling confirms what we already knew: Airbus has had a massive illegal advantage over Boeing for years. In today’s ruling, the World Trade Organization rejected 80 percent of the European Union’s alleged subsidy claims.

The EU suit came after the WTO ruled that Airbus recieved billions in unfair launch aid for its aircraft that allowed it to undermine Boeing’s market share around the globe. That ruling became a political football during the KC-X contest, with Boeing supporters arguing that the subsidies would help EADS undercut Boeing’s 767-based NewGen Tanker offer with its bigger, newer and more expensive Airbus A330 based bid for KC-X.

Canwell went on to say:

The EU should put a stop to launch aid, which distorts the true price of products and creates unfair competition in the global marketplace.

Today’s ruling reaffirms that American sweat equity beat out massive illegal subsidies for the Air Force’s tanker contract. American workers will win every time, if given a fair playing field. The deck was stacked in favor of Airbus – and American ingenuity won anyway.

Keep in mind that KC-X is only one small part of the overall battle between Boeing and EADS who are slugging it out over the top spot in the global heavy aircraft market. Many predict the two giants will need to figure out some way to get along and play nice (aka: resolve the subsidies issue, among other things) in the face of what’s expected to be increased competition from a Chinese aircraft industry in the coming decades.

Meanwhile, EADS backer, Rep. Jo Bonner (R-Ala.), yesterday took an oversight stance in the new contract asking Air Force brass during a House Appropriations defense subcommittee hearing if they were required to inform lawmakers about every small change made to the KC-X contract over the coming months and years. Air Force Secretary Michael Donley effectively replied, not really.

“We owe you annual updates as we come back through the development program…and production,” said Donley. But, “I don’t believe we’re required by law to inform you of every contract change but certainly we’ll make that information available on request.”