Financial Times FT.com

European Comment: UK fires a tricky rocket at EADS

By Brian Groom

Published: June 21 2004 22:29 | Last updated: June 21 2004 22:29

The threat by Britain's Ministry of Defence to cancel negotiations over a £13bn ($23.8bn) deal for a consortium led by EADS to supply refuelling aircraft comes at a sensitive time for the Franco-German parent of Airbus. Just as a chink of light for EADS appears in the impregnable US defence market, this is a threat closer to home it could do without.

It was a surprise in January when the EADS consortium edged out a team led by Boeing and BAE Systems to enter exclusive negotiations for the deal. Together with a smaller Australian contract, it boosted EADS's credibility as a potential breaker of Boeing's stranglehold over US tanker orders.

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