WASHINGTON, March 7 (AFP) – Boeing said Thursday it would offer a new 787-based refueling aircraft to win a $35-billion US Air Force contract, insisting its tanker would be cheaper than one built by rival Airbus.

The US aerospace giant said it would submit its proposal by May 10, within the 75-day period set out in the Pentagon's request for proposals for the contract for 179 planes.

''We intend to bid for the honor to work with our Air Force customer to replace the existing fleet of KC-135 aircraft with a new-generation, multi-role tanker in a fair and transparent acquisition process,'' said Dennis Muilenberg, president and chief executive of Boeing Defense, Space & Security.

Boeing is the first to announce it will bid in the troubled competition to replace a 1950s-era fleet of Boeing KC-135 tankers, which has seen two previous attempts fail amid controversy and scandal.

It remained unclear whether the European Aeronautic Defence and Space Company (EADS), parent of Airbus, and its US partner Northrop Grumman would bid on the contract after accusing the Pentagon of favoring arch-rival Boeing.

The Defense Department on February 24 issued its final terms for the high-stakes competition, known as a request for proposals (RFP), promising a fair contest for aerospace rivals Boeing and EADS.

''Northrop Grumman continues to work toward a bid/no-bid decision through a thorough analysis of the final RFP and discussions with our tanker teammates,'' Northrop spokesman Randy Belote told AFP Thursday.

''We will announce our decision when the review is completed.''

An EADS spokesman, contacted in Paris, said the company was still reviewing the RFP.