SEOUL and WASHINGTON — European aerospace giant Airbus won a $1.33 billion deal Tuesday to supply air refueling tankers to South Korea, beating US rival Boeing, Seoul's military procurement agency said.
Under the 1.488 trillion won deal, Airbus Defence and Space will supply four A330 MRTT aircraft by 2019 to South Korea's air force.
The A330 MRTT, a military derivative of the A330-200 airliner, was selected over Boeing's KC-46A, the state agency said.
It is South Korea's first introduction of the mid-air refueling aircraft which would allow jet fighters to take off with more loads of weapons.
The Defence Acquisition Programme Administration said the Airbus model received good marks in its price and performance as well as the amount of personnel and cargo it can carry.
South Korea's military procurement needs, especially where the air force is concerned, have overwhelmingly been met by US suppliers in the past — a reflection of their close military alliance. But European companies led by Airbus have also secured a series of military contracts.
In 2005, Airbus Helicopters won a contract for transport choppers called "Surion" in partnership with Korea Aerospace Industries (KAI). South Korea unveiled the first Surion helicopter in 2009.
In March this year, Airbus Helicopters inked a deal worth €1.5 billion ($1.6 billion) to build more than 300 civil and military helicopters for South Korea also in partnership with KAI.
The selection of Airbus is a blow to Boeing, which remains in search of its first foreign customer for the KC-46, dubbed the Pegasus by the US Air Force.
The Pentagon has committed to procuring 179 of the tankers. The platform has been beset with mechanical issues that have forced delays on milestones, but company officials have indicated they expect to meet a contractual obligation to provide 18 ready-to-go tankers on the ramp by 2017.
A Boeing spokesperson said that while the company was "disappointed" by the decision, it remains "committed to our partnerships in Korea."
The A330 has had much better luck on the foreign market than Boeing's offering, with South Korea joining the United Kingdom, UAE, Saudi Arabia, Singapore and Australia as operators of the tanker. India and France are not under contract, but are also expected to buy some of the A330 tankers in the future.
The two designs will next go head to head in Japan, another nation that traditionally prefers US defense goods to European — but one where price will also likely be a factor.