Airbus Is Preferred Bidder on India Military-Tanker Plane

Airbus SAS said it was named the preferred bidder to supply air-to-air refueling aircraft to the Indian military, in a potential deal valued at more than $1 billion.

India is discussing the purchase of six tankers, Airbus Military said in an e-mail today. The start of deliveries of the modified A330 passenger jets, which are due to span 51 months, is still being negotiated, said the Madrid-based Airbus subsidiary building military transport aircraft.

The Indian defense ministry is undertaking a wide-ranging modernization of its air force and had to scrap a previous refueling aircraft competition when the selection process came under scrutiny. Russia’s Ilyushin Il-78 offer was the losing bidder in the latest competition.

“This has been a long and tough competition and we are honored to have been selected,” Airbus Military Chief Executive Officer Domingo Ureno Raso said in the statement. “We are fully committed to the next stage of the negotiations.”

Airbus said it expects to sign the contract this year. Preferred-bidder status in India kicks off sometimes lengthy contract talks. Dassault Aviation SA (AM), named the preferred bidder a year ago to supply Rafale fighters to India, remains in talks with the government about concluding that agreement.

Airbus has delivered A330-based tankers to the Royal Australian Air Force, the lead customer for the refueler, as well as to the United Arab Emirates, Saudi Arabia and the U.K. The Royal Air Force is due to become the largest operator, with 14 tankers under a fee-for-service arrangement through the AirTanker consortium. A contract with India would boost the total order book for A330 refuelers to 34 aircraft.

European Aeronautic, Defence & Space Co., the parent of Airbus, lost a competition to Boeing Co. (BA) in early 2011 to supply 179 tankers to the Pentagon.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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