Airbus will not cut prices to win US tanker bid: EADS

18th July 2010, Comments 0 comments

European aircraft manufacturer Airbus will not slash prices as it battles US rival Boeing for a 40-billion-dollar US Air Force contract, the head of its parent company EADS said Sunday.

"I want to be extremely clear, we want to gain money. We prefer to lose (the contract) than not to gain money," EADS chief executive Louis Gallois said ahead of the opening of the Farnborough International Airshow on Monday.

The Financial Times Deutschland (FTD) reported last week that Airbus had cut the proposed cost of the contract to build 179 aerial refuelling tankers by at least 10 percent from the level in a previous offer in 2008.

"Boeing said they have reduced the price. I don't know," Gallois told reporters in London, adding: "We do our price with our profitability target. I think we are competitive."

Last week, the two rival firms submitted their offers to Washington, ahead of the decision due in November.

It will be the third time the contract has been awarded -- Boeing won the first one but it was annulled due to a conflict of interest, while a later Airbus deal was also annulled because of concerns over the way the bids were analysed.

Gallois said he expected a "fair" decision from the Pentagon, saying: "They have demonstrated so far that they wish a competition to get the best price and the best product for the taxpayers."

He said the deal would be a "very important strategic move for us" because the European Aeronautic Defence and Space Company would boost its US business -- although he admitted the aerospace giant would also have to prepare to "live without it if we don't win."

Meanwhile, Gallois condemned the postponement this month of a World Trade Organisation (WTO) ruling on US subsidies to Boeing, after it ruled that some state support for Airbus was illegal.

"I think it's not a fair situation," he said.

Gallois was speaking ahead of the opening Monday of the biennial Farnborough airshow near London, a key industry event.

© 2010 AFP

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