Airbus Military wins $2 bn Indian Air Force deal for mid-air refueling aircraft

Ahead of the French President Francois Hollande's visit to India shortly, Indian Air Force (IAF) combat machines are set to be refuelled by the European aircraft manufacturer Airbus Military which has won a tender to supply six A330 air refuelling tankers, a deal worth more than $2 billion.

Airbus Military, the group's defence division has been selected by the government as the preferred bidder to supply its A330 MRTT (Multi Role Tanker Transport) to the IAF.

The Airbus A330 MRTT has been found to be the lowest bidder in a two-horse race against the Russian Ilyushin Il-78M, six of which the IAF already operates.

The latest tender for a MRTT was reissued in September 2010, nine months after a similar MRTT contract featuring the same two tankers for around $1.06 billion was stopped.

The decision follows a lengthy and thorough selection process including the completion of extensive flight demonstrations in India by the A330 MRTT during which the aircraft refuelled multiple types of IAF fighters and operated from the high-altitude IAF base at Leh.

The IAF's requirement for mid-air tankers is urgent as it will be acquiring 200-300 additional combat aircrafts over the next two decades.

Detailed negotiations will now begin which it is expected will lead to the award of a final production contract for an envisaged six aircrafts in the 2013-14 financial year since commercial negotiations with the company will take some time.

Sources in the Ministry of Defence (MoD) said, "There has been a massive cut (Rs 10,000 crore) in the defence capital budget for the ongoing fiscal, and the four-engine IL-78 and the two-engine Airbus-330 had passed the extensive field evaluation trials conducted by IAF. However, it was the latter that emerged as the cheaper option in the subsequent commercial evaluation"

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