updated 11/10/2006 2:11:37 PM ET 2006-11-10T19:11:37

The Air Force awarded a lucrative contract Thursday for search and rescue combat helicopters to a team led by aerospace giant Boeing Co.

Chicago-based Boeing beat out rival Lockheed Martin Corp. and helicopter maker Sikorsky Aircraft for the contract to build 141 helicopters by 2019 for the Air Force's fleet of rescue aircraft, known as the Combat Search and Rescue program.

The initial contract award is for $712 million; the program may be worth as much as $13 billion.

Some Wall Street and industry analysts had thought Maryland-based Lockheed would win. The Lockheed version had a roomier cabin and three powerful engines and was cheaper than Boeing's, a modified version of its CH-47 Chinook helicopter.

The helicopters will be built at Boeing's plant in Ridley Park, Pa., near Philadelphia. About 200 new engineering jobs will be created initially, with more jobs expected as production moves forward. There are currently about 4,800 employees in Ridley Park, Boeing spokesman Joseph LaMarca Jr. said.

The decision to award the contract to Boeing is the latest blow to Sikorsky, a division of United Technologies Co., which sought to replace its own Pave Hawk helicopters that the Air Force has flown since 1982 on rescue missions.

Sikorsky, based in Stratford, Conn., spent about $1 billion developing the new S-92 model, according to analyst estimates, but it has yet to find a U.S. government buyer. Sikorsky has a deal to provide 28 to the Canadian government.

Boeing called the Air Force decision a vote of confidence in the company.

A team led by Lockheed had offered the US-101, the same helicopter selected last year for the Navy's presidential helicopter, Marine One. Boeing also teamed with Sikorsky to offer the S-92, a newer helicopter mostly used by offshore oil companies.

The Navy's decision to award the presidential helicopter fleet to Lockheed and its international partners, including the British-Italian company, AgustaWestland, sparked animated debate over buy-America issues.

Earlier this week, Boeing got a boost when FedEx Corp. became the first customer to cancel an order for Airbus' much delayed A380 superjumbo jets and said it would buy Boeing 777s.

FedEx cited production delays for its decision to retract an order for 10 double-decker A380s. Its FedEx Express unit has ordered 15 Boeing 777 freighters with a list price of $3.5 billion and taken options on an additional 15 planes.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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