The Financial Times (3/28, Pfeifer) reports that the British government has contracted AirTanker Ltd., a consortium including EADS, Rolls-Royce, Cobham, Thales, and VT Group, to "provide air-to-air refueling tankers to the Royal Air Force (RAF)." The AirTanker consortium "will provide 14 Airbus A330-200 aircraft" in order "to replace the RAF's ageing fleet" of "TriStar and VC-10 aircraft."

The AP (3/28, Panja) explains, "Under the terms of the British deal, the planes will be owned by AirTanker, but will fly in RAF (Royal Air Force) colors, providing air-to-air refueling and passenger air transport tasks. The consortium will also have the rights to commercially lease five of the aircraft, which can carry 290 passengers and freight." According to one source, the deal is structured so "that the amount of money the consortium will receive will be directly linked to the amount of air miles flown by the new planes." The consortium is therefore "taking significant risk" that the RAF will "use the aircraft a lot."

Bloomberg (3/28, Rothwell, Rothman) notes, "The Airbus tankers will refuel RAF combat planes such as the Tornado and Eurofighter Typhoon, and also will be utilized for transport missions."

The U.K.'s decision follows a similar procurement initiative in the U.S., where "Boeing lost out in the race to land an initial $1.5 billion re-fueling contract for the U.S. Air Force" against Airbus, Forbes (3/28, Laurent) points out. However, the British "situation...was rather different," in part because "the EADS consortium won the status of 'preferred bidder' back in 2005, with the financing of the bid proving the main sticking point until now." The International Herald Tribune (3/28, Clark) and the U.K.'s Guardian (3/28, Milner) also report the story.