Boeing confirmed on Monday that it would offer a version of its 767-200 aircraft in competition with the Airbus A330-200 for a US Air Force refuelling contract worth an expected $40bn.

The air force is expected to make a decision later this year on replacing the first tranche of its ageing fleet of Boeing-made KC-135 tankers with 179 new aircraft. First deliveries are expected in 2011 or 2012.