THE US Air Force has awarded a $35bn contract to build the next generation of air refuelling tankers to Boeing, scuppering the hopes of European bidder Airbus.

The announcement was made at the Pentagon late last night, after the financial markets closed, dealing a major blow to the Airbus consortium, which has a giant wing manufacturing plant in Broughton, near Chester.

The European Aeronautic Defence and Space Co, the Airbus parent, had bid for the contract.

The decision was certain to be welcome news in Washington state and Kansas, where much of the work on the tanker will be done.

The Air Force has tried for nearly a decade to replace its ageing fleet of 1950s-era tankers, the equivalent of a flying petrol station.

Both Boeing (BA, Fortune 500) and the North American unit of EADS – which owns Airbus – submitted bids for the blockbuster contract and planned to base their planes on popular civilian aircraft, specifically the Boeing 767 and Airbus A330.

"We're honoured to be given the opportunity to build the Air Force's next tanker and provide a vital capability to the men and women of our armed forces," Boeing CEO Jim McNerney said in a statement. Boeing shares jumped more than 3% in after-hours trading.

The announcement is the culmination of a decade-long process that has been fraught with pitfalls and political pressure.

Both companies estimated the contract would support thousands of jobs, with Boeing planning to build the aircraft in Everett, Washington, and Wichita, Kansas. EADS would have based its production facilities in Mobile, Alabama.

But, last night , it was Governors Christine Gregoire, of Washington, and Sam Brownback, of Kansas, who won out.