FARNBOROUGH, July 13, 2008 (AFP) - European aerospace group EADS is confident of landing the US contract to produce a new generation of aerial fuel tankers by the end of the year, bosses said Sunday.

'We will get the tanker contract, because we have the best airplane,' EADS chief Louis Gallois he told a seminar ahead of the Farnborough International Air Show south-west of London, which kicks off Monday.

John Young, who runs EADS's operations in North America, added: 'We hope to close the deal by year end, but it may be extended until January or February without affecting the process and we still expect to win.'

The Pentagon reopened Wednesday the 35-billion-dollar contract to produce a new generation of fuel tankers, acknowledging flaws in the US Air Force's decision to award it to Northrop Grumman and European partner EADS.

In an embarrassing about-face, US Defense Secretary Robert Gates said Northrop Grumman and its rival Boeing would be asked to submit revised bids for the tanker contract to a new Defense Department team.

The choice of EADS over US firm Boeing raised protectionist hackles in Congress, with lawmakers citing security concerns and job losses to Europe at a time when the US economy is struggling.

The 179 new aircraft are to replace the air force's fleet of ageing tankers made by Boeing, up to now the sole supplier of air refuelling planes to the US military.

The contract is for the initial phase of a fleet replacement project worth some 100 billion dollars over the next 30 years.

Young confirmed EADS's intention to invest in the United States in line with the group's long-term 'Vision 2020' strategy which was launched last January.

EADS strategy chief Marwan Lahoud also forecast big acquisitions in the US market in 2009.

Most of EADS's production costs are in euros, though their sales are mostly in dollars. The group wants to expand in the United States, to avoid being penalised by the weakness of the US currency.