CANBERRA, April 16 (Reuters)

"Australia selected Airbus parent EADS on Friday to supply tanker
aircraft worth US$1.5 billion, moving to extend its military reach and
boosting the Franco-German company's efforts to develop its arms
business.

Three months after beating Boeing Co (BA.N: Quote, Profile, Research)
for a British tanker order, EADS again defeated its U.S. rival for the
deal to supply the Royal Australian Air Force with five tankers for
refuelling other aircraft in flight.

The win by European Aeronautic Defence & Space Co NV (EAD.DE: Quote,
Profile, Research) (EADS) deprives Boeing of an order for its
dwindling 767 airliner production line, which the Chicago-based
company is hoping to keep going with orders for the plane's tanker
version, especially from the U.S. Air Force.

EADS's tanker-transport aircraft based on the Airbus A330 wide-body
airliner offered the best value for money, Defence Minister Robert
Hill said.

"We've no doubt over the years this will become an aircraft of choice
for the particular capability," he told reporters, adding negotiations
with EADS would be sealed later this year.

"In terms of capability the advice was that the Airbus won the
contest. In terms of value for money the Airbus also won the contest
over Boeing."

The new aircraft, to be delivered from 2007, would be capable of
refuelling Australia's current fighter jets and the Joint Strike
Fighter aircraft currently being developed in a U.S.-led project, the
minister said.

It could also carry 293 passengers and substantial volumes of cargo.
Defence analysts said the government had been expected to choose the
Airbus plane, because it was larger and more versatile than the 767,
even though that model might become a standard tanker for the
country's most important ally, the United States.

"The Australians tend to buy the thing that suits them best in terms
of equipment, and the more versatile the platform the more likely they
are to buy it," said Neil James, executive director of the Australian
Defence Association.

The A330 won Britain's endorsement in January when that country chose
an EADS-led consortium for a 13 million pound ($24 billion) contract
to replace the Royal Air Force's tankers with A330s.

Hill valued the Australian contract at A$2.0 billion (US$1.5 billion).

EADS is building another tanker model for Germany and Canada and aims
to win at least 30 percent of the market."

Cheers
John Cook

Any spelling mistakes/grammatic errors are there purely to annoy. All
opinions are mine, not TAFE's however much they beg me for them.

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