Boeing, Air Force in Talks on Leasing 767s

Boeing Co., the No. 2 defense contractor, is beginning negotiations to lease as many as 100 767 passenger jets to the U.S. Air Force.

The jets will be converted to aerial refueling vehicles. Analysts estimate the potential value of the contract at $26 billion, though the company is offering to provide the aircraft for less than that, said Paul Guse, a company spokesman. Talks are to begin immediately.

Chicago-based Boeing is counting on the leases to help it weather a decline in its commercial aircraft business. The company said the airline slump brought about by the Sept. 11 terrorist attacks cost it almost $700 million in the fourth quarter.

Congress authorized the lease of the Boeing planes last year as a cost-effective way for the Air Force to replace its aging fleet of KC-135 tanker planes.

The Air Force solicited other proposals after EADS, a parent company of Airbus, objected. The Air Force later rejected an EADS proposal.

The Washington Post reported last week that the Air Force chose Boeing because of Airbus’ lack of experience in building tanker aircraft. Airbus, which is based in France, is the No. 2 plane maker.

Shares of Boeing, the largest plane maker, rose 92 cents to $48.25 on the New York Stock Exchange on Thursday. U.S. markets were closed Friday.