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Airbus Won't Cut Prices To Win US Air Tanker Contract-EADS CEO
Sun, 18th Jul 2010 06:00
LONDON (AFP)--European aircraft manufacturer Airbus won't slash prices as it battles U.S. rival Boeing (BA) for a $40 billion U.S. Air Force contract, the head of its parent company EADS said Sunday.
"I want to be extremely clear, we want to gain money. We prefer to lose [the contract] than not to gain money," EADS Chief Executive Louis Gallois said ahead of the opening of the Farnborough International Airshow on Monday.
The Financial Times Deutschland (FTD) reported last week that Airbus had cut the proposed cost of the contract to build 179 aerial refueling tankers by at least 10% from the level in a previous offer in 2008.
"Boeing said they have reduced the price. I don't know," Gallois told reporters in London, adding: "We do our price with our profitability target. I think we are competitive."
Last week, the two rival firms submitted their offers to Washington, ahead of the decision due in November.
It will be the third time the contract has been awarded--Boeing won the first one but it was annulled due to a conflict of interest, while a later Airbus deal was also annulled because of concerns over the way the bids were analyzed.
Gallois said he expected a "fair" decision from the Pentagon, saying: "They have demonstrated so far that they wish a competition to get the best price and the best product for the taxpayers."
He said the deal would be a "very important strategic move for us" because the European Aeronautic Defence and Space Company (EADSY, EAD.FR) would boost its U.S. business--although he admitted the aerospace giant would also have to prepare to "live without it if we don't win."
Meanwhile, Gallois condemned the postponement this month of a World Trade Organization (WTO) ruling on U.S. subsidies to Boeing, after it ruled that some state support for Airbus was illegal.
"I think it's not a fair situation," he said.
(END) Dow Jones Newswires
July 18, 2010 01:00 ET (05:00 GMT)
"I want to be extremely clear, we want to gain money. We prefer to lose [the contract] than not to gain money," EADS Chief Executive Louis Gallois said ahead of the opening of the Farnborough International Airshow on Monday.
The Financial Times Deutschland (FTD) reported last week that Airbus had cut the proposed cost of the contract to build 179 aerial refueling tankers by at least 10% from the level in a previous offer in 2008.
"Boeing said they have reduced the price. I don't know," Gallois told reporters in London, adding: "We do our price with our profitability target. I think we are competitive."
Last week, the two rival firms submitted their offers to Washington, ahead of the decision due in November.
It will be the third time the contract has been awarded--Boeing won the first one but it was annulled due to a conflict of interest, while a later Airbus deal was also annulled because of concerns over the way the bids were analyzed.
Gallois said he expected a "fair" decision from the Pentagon, saying: "They have demonstrated so far that they wish a competition to get the best price and the best product for the taxpayers."
He said the deal would be a "very important strategic move for us" because the European Aeronautic Defence and Space Company (EADSY, EAD.FR) would boost its U.S. business--although he admitted the aerospace giant would also have to prepare to "live without it if we don't win."
Meanwhile, Gallois condemned the postponement this month of a World Trade Organization (WTO) ruling on U.S. subsidies to Boeing, after it ruled that some state support for Airbus was illegal.
"I think it's not a fair situation," he said.
(END) Dow Jones Newswires
July 18, 2010 01:00 ET (05:00 GMT)
