The European aerospace giant EADS has said it will not bid for a $35bn (£23bn) Pentagon tanker contract after its partner Northrop Grumman pulled out. It said the terms "clearly favour" the US aerospace rival, Boeing, which is expected to win the in-flight aircraft refuelling tender.
The US Air Force is seeking to replace its ageing fleet of KC-135 mid-air refuelling tankers, for which Northrop and EADS planned to supply an aircraft based on the large capacity A330 aircraft made by EADS' subsidiary, Airbus. Boeing's tanker is in contrast based on the smaller 767F freighter.
EADS' move prompted harsh words from the European Commission. Brussels said it would be "extremely concerned if it were to emerge that the terms of tender were such as to inhibit open competition for the contract".
Echoing the Commission's concerns, UK Business Secretary Lord Mandelson said he was extremely disappointed at the announcement.
EADS chief executive Louis Gallois told reporters that the company has "no chance to win in the competition in these conditions."
US authorities have not yet responded to EU's comments, although the Pentagon said it regretted EADS' decision.
The Franco-German defence giant also announced results for 2009, revealing £692m in losses. EADS shares closed 2.8 percent lower, after gaining 12.74 percent since the start of the year.
