The Air Force announced Thursday it awarded a $3.5 billion initial contract to Boeing for the production of 18 next-generation aerial refueling tankers.
That is a down payment on a contract worth about $35 billion for 179 planes.
Aerial refueling tankers allow the military to refuel aircraft in mid flight, greatly extending the range of operation for smaller aircraft, while also providing the capability to carry cargo and airlift personnel.
Both Boeing and the North American unit of EADS — which owns Airbus –submitted bids for the blockbuster contract and planned to base their planes on popular civilian aircraft, specifically the Boeing 767 and Airbus A330.
“We’re honored to be given the opportunity to build the Air Force’s next tanker and provide a vital capability to the men and women of our armed forces,” Boeing CEO Jim McNerney said in a statement.
Boeing shares jumped more than 3% in after-hours trading.
