US Air Force leaders wary of tanker services offering

Posted on: Jun. 20th, 2006 || Source: marketwatch.com | E-mail Article | Print Article

WASHINGTON (MarketWatch) -- U.S. Air Force leaders say they are wary of outsourcing tanker services, even though the Pentagon's quest for an updated aerial refueling fleet has opened the door to third-party providers.

Omega Air Inc., a private company owned by Irish investors, has offered the Air Force up to 60 modified DC-10s on an hourly basis. Its services will compete against new tankers offered by Boeing Co. (BA) and a team of Northrop Grumman Corp. (NOC) and the European Aeronautic Defence and Space Co. (5730.FR), primary parent of Airbus.

The Air Force hopes to pick a winner next year. But the competition has already begun, with an Air Force request for information that specifically asked about service contracts as well as new planes. Officials say the Omega bid adds a welcome dimension to the heavily scrutinized contest, but it also raises a host of new questions.

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