Northrop Grumman Corp.'s stock jumped more than 4 percent Monday morning after its surprise announcement Friday that it had been awarded a $40 billion contract to make the Air Force's next generation of aerial refueling tankers.


The Los Angeles-based contractor and its European partner, European Aeronautic, Defence & Space Co., are to build up to 179 of the aircraft based on the Airbus A330 commercial jet. EADS is the parent of Airbus.


Flying tankers allow fighter jets and other aircraft to refuel without landing.


The Chicago-based Boeing Co. has built tankers for the Air Force for more than 50 years. But Air Force officials said the Northrop plane, which is larger and can carry more fuel than Boeing's, was a better value because it will allow the Defense Department to purchase fewer aircraft.


The contract is the first of three orders to replace more than 500 planes, for a total program value that could top $100 billion.


It's expected that Boeing will challenge the award, which could delay the program.


Northrop won the deal despite the fact that Congress and Boeing openly questioned whether the Pentagon should award such an important military contract to a joint bid that includes a foreign company.


Much of Northrop's plane will be built in Europe, but the Northrop-EADS venture plans to use hundreds of U.S. suppliers and do the final assembly in the United States, supporting 25,000 American jobs. The first planes are expected to enter service in 2013.


Los Angeles County and California also benefits more from Northrop's proposal than Boeing's. Northrop said its program will support 7,500 jobs in the state and generate $360 million for the state's economy. It's presumed the majority of those jobs will be in Los Angeles County. Boeing said its program would have supported 4,000 California jobs and contributed some $175 million.


Shares in Northrop were up 4.2 percent, or $3.31, to $81.92 in early trading Monday on the New York Stock Exchange.

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