European defense and aircraft manufacturers Airbus has confirmed that it will be entering the US market once again. It is teaming up with fellow defense contractors Lockheed Martin to deliver a series of services for US air tankers, particularly those centered around meeting refueling needs.
This is a boost to Airbus, which suffered a big blow back in 2011 when it lost the US Air Force contract to its rivals Boeing. This turned out to be an acrimonious dispute that Airbus struggled to recover from.
Both Airbus and Lockheed Martin cited a growing demand for aircraft defense tankers to meet complex refueling needs, and they have now entered into an agreement to explore all options with the US Air Force. Various defense customers in the US are likely to clamor for these services, which will allow both companies to further position themselves in this market.
According to a joint statement from the companies, they will aim to go through ‘a broad spectrum of opportunities,’ offering up Airbus’ A330 series for use to test out all potential permutations.
Many options are on the table and, at first, the deal should involve Airbus and Lockheed Martin finding ways to refuel current tankers. However, there is clear scope to develop new tankers for the market to meet the changing needs of their contractors.
Australia, the UK and France have already enlisted Airbus for their A330 MRTT defense crafts, which gives credence to the company’s desire to branch out into international markets with proof that it can deliver what is necessary.
According to the US Air Force, it intends over the long term to fully replace its 400-strong fleet at a cost that should run into the billions of dollars. This will help provide a continual capital stream for Airbus to invest into new technologies.
Lockheed Martin Chair and CEO Marillyn Hewson believe that the two companies are in a unique position by combining their expertise and experience. She said that they will be ‘well positioned to provide the USAF [US Air Force] and allies around the world with the advanced refueling solutions needed to meet 21st-century security challenges.’
Tom Enders, CEO of Airbus has confirmed he will be leaving his post soon but has described the agreement as one involving a ‘great industry team.’
With Airbus having reestablished its credibility in the US market, there is a chance that the rivalry between itself and Boeing could reopen. The two companies have countered each other several times, and the determination to be the ones chosen for the highly lucrative contract to replace all the US air fleet has already seen two Boeing CEOs leave. This new agreement will be a welcoming present for the new Airbus CEO.
The original deal between the US Air Force and Boeing, made back in 2002, was fraught with potential conflicts of interests, and late US Senator John McCain was one of the people known for standing up against it. Former Air Force procurement official Darlene Druyun was liaising with Boeing Finance Director Michael Sears while diligence talks were still ongoing, so the US Congress stepped in and vetoed the deal. They both went to prison in the fallout.