U.S. Air Force Awards $35B Tanker Contract to Boeing

WASHINGTON -- The U.S. Air Force has awarded a $35 billion contract to build the next generation of air refueling tankers to Boeing Co.

The announcement was made at the Pentagon late Thursday after the financial markets closed. It was certain to be welcome news in Washington state and Kansas, where much of the work on the tanker will be done.

The decision was a blow to the European Aeronautic Defence and Space Co., the Airbus parent that also had bid for the contract. It was a major disappointment for Alabama, which had been counting on the work at a long-shuttered military base in Mobile.

The Air Force has tried for nearly a decade to replace its aging fleet of 1950s-era tankers, the equivalent of a flying gas station.