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EADS Will Not Appeal Air Tanker Contract

Airbus employess work on an A320 at the Airbus plant in Hamburg-Finkenwerder, northern Germany, February 23, 2011

European aerospace manufacturer EADS says it will not appeal the decision that awarded a lucrative contract to its rival, Boeing.

EADS announced Friday at a press conference it was choosing instead to focus its attention on future opportunities. But EADS' North American chairman, Ralph Crosby, said his company was "ready to step in" if Boeing should fail to deliver the new air tankers on schedule.

EADS and Boeing both bid on a contract to build nearly 200 refueling planes for the U.S. Air Force. The new planes will replace the Boeing KC-135 to perform the complex task of refueling military aircraft in mid-air. In-flight refueling greatly extends the range of fighters, bombers and transport aircraft, giving some the ability to reach targets anywhere in the world.

The Air Force told EADS that Boeing priced the job significantly lower than EADS did - and according to the terms of the contract competition, that rendered any other factors moot.

Crosby suggested what he called Boeing's "extremely low-ball offer" was part of a strategy to block the European company from gaining a foothold in the United States. EADS had planned to build the tankers at a new plant in the southeastern U.S. state of Alabama.

EADS' announcement Friday finally puts to rest wrangling that has been underway for a decade. The hard-fought contest has already included a contracting scandal that saw a Boeing manager and a top Air Force official go to jail.

Some information for this report was provided by AP, AFP and Reuters.