* Boeing unsure whether 767 or 777 will be offered
* Air Force: No impact from WTO ruling
* Boeing determined to learn lessons from past bid (Adds Boeing comments from interview)
By Andrea Shalal-Esa
NATIONAL HARBOR, Maryland, Sept 14 (Reuters) - Boeing Co (BA.N) does not plan any major modifications to its 767 or larger 777 aircraft in competing for the U.S. Air Force's multibillion-dollar aerial tanker contract, a Boeing executive said on Monday.
After Boeing's proposal was downgraded during the last competition for risk associated with planned modifications to its 767 aircraft, the company will not go that route again."We're not doing the Franken-tanker," said Rick Lemaster, Boeing program manager for the tanker project, using a word coined by critics who said Boeing's last bid was a horror made up of parts from different models of the 767.
Lemaster told reporters at the annual Air Force Association conference just outside Washington that his company is waiting to see the Air Force's final list of requirements for the tanker before deciding whether to bid its 767 or 777 model.
Boeing would not offer a plane with major modifications, regardless of which aircraft it decided upon. For example, Boeing will not offer to install a different wing for the tanker competition, Lemaster said.
U.S. Air Force Secretary Michael Donley said the service was close to releasing its draft request for proposals (RFP) in the tanker contest, which will pit Boeing against Northrop Grumman Corp (NOC.N) and its European partner, Airbus parent EADS (EAD.PA).
Donley said the Air Force sees no need to add specific language to the RFP document as a result of a World Trade Organization ruling this month which found Airbus benefited from some illegal subsidies. Boeing supporters argue that the WTO decision should be factored into the tanker competition.
Donley said the WTO decision was preliminary, and would be followed by another case, brought by the European Union, which charged Boeing also benefited from illegal subsidies. "We see no need to make immediate adjustments in the RFP," he said.
LESSONS LEARNED
Boeing is determined to learn lessons from its failed bid in the last competition for a $35 billion deal to build some 179 tankers needed by the Air Force for mid-air refueling, Lemaster said. The winning bid chosen that time -- and later canceled -- was from Northrop and EADS.
Boeing, in that competition, offered a modified 767 aircraft because it was convinced the Air Force did not want a bigger aircraft like the 777.
Lemaster said Boeing had gained experience building 767 tankers for Italy and Japan over the past four to five years, and was confident the company could adapt its refueling technologies to the larger 777, if that aircraft appeared to better meet the Air Force's requirements.
"What we propose to the Air Force will be a low-risk solution," he said.
Lemaster rejected a suggestion that Boeing would offer the Air Force a less capable tanker than before. "This is not a dumbed-down tanker," he told Reuters in a later interview.
Lemaster said the Air Force had tested the Boeing tanker on behalf of the Italian government, and the Navy was due to carry out a similar "military utility observation" soon.
Boeing has built three tankers for Italy and is finishing work on a fourth. The company is waiting for final certification of the aircraft, which would pave the way for the Italian government to begin its acceptance process.
Boeing has delivered three tankers to Japan, and those have been in operational use since April. A fourth tanker is due to be delivered by the end of the year or early next.
Lemaster said Boeing would also put a bigger emphasis on affordability this time since the Northrop aircraft was judged to have a lower life cycle cost in the last competition.
"We're determined not to let that be a lesson that we didn't learn," Lemaster said.
Lemaster said Boeing expected the draft rules to be released later this month, followed by final rules in the following months, with a deadline for submissions by the companies in January and a contract award next summer.
He said the company had not yet decided which engine would power its 777 offering, but was in discussions with all three approved manufacturers: General Electric (GE.N), United Technologies Corp's (UTX.N) Pratt & Whitney unit, and Britain's Rolls-Royce Group PLC (RR.L).
Boeing shares closed 38 cents lower at $50.97 on Monday.
(Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn, Bernard Orr)
"What we propose to the Air Force will be a low-risk solution," he said.
Lemaster rejected a suggestion that Boeing would offer the Air Force a less capable tanker than before. "This is not a dumbed-down tanker," he told Reuters in a later interview.
Lemaster said the Air Force had tested the Boeing tanker on behalf of the Italian government, and the Navy was due to carry out a similar "military utility observation" soon.
Boeing has built three tankers for Italy and is finishing work on a fourth. The company is waiting for final certification of the aircraft, which would pave the way for the Italian government to begin its acceptance process.
Boeing has delivered three tankers to Japan, and those have been in operational use since April. A fourth tanker is due to be delivered by the end of the year or early next.
Lemaster said Boeing would also put a bigger emphasis on affordability this time since the Northrop aircraft was judged to have a lower life cycle cost in the last competition.
"We're determined not to let that be a lesson that we didn't learn," Lemaster said.
Lemaster said Boeing expected the draft rules to be released later this month, followed by final rules in the following months, with a deadline for submissions by the companies in January and a contract award next summer.
He said the company had not yet decided which engine would power its 777 offering, but was in discussions with all three approved manufacturers: General Electric (GE.N), United Technologies Corp's (UTX.N) Pratt & Whitney unit, and Britain's Rolls-Royce Group PLC (RR.L).
Boeing shares closed 38 cents lower at $50.97 on Monday.
(Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn, Bernard Orr)
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