Airbus parent EADS declined to comment on Wednesday after French President Nicolas Sarkozy stoked expectations that it would re-enter a competition to supply aerial tankers to the U.S. Air Force.

Speaking during a visit to Washington on Tuesday, Sarkozy said Europe's EADS would bid for the $35 billion contract if the terms of the competition were fair and open as President Barack Obama had promised.

I said to him (Obama), I trust you; if you tell me that the tender will be fair and transparent, then EADS will bid and we trust you, Sarkozy told a joint press conference with Obama.

France holds a 15 percent stake in the French-German company, but has no formal say over its strategy.

An EADS spokesman declined to comment.

EADS shares rose 0.81 percent by 1005 GMT, outperforming France's CAC 40, buoyed by a Malaysian order for 17 Airbus A330 planes worth $3.6 billion at list prices.

Obama told reporters at a joint news conference he had told Sarkozy the process would be fair and that the French leaders's trust was justified.

French and German officials reacted angrily earlier this month when EADS' former partner, Northrop Grumman Corp, withdrew from the competition after concluding its terms favored the smaller 767 plane offered by Boeing Co.

Pentagon officials then told EADS they would consider the company as a prime contractor if it wanted to bid on its own.

EADS requested several changes, including a 90-day extension to the May 10 bid deadline.

Sources on both sides of the Atlantic told Reuters last week that EADS was gravitating toward mounting a solo bid after facing an internal split over the move, but had not yet finalized its decision.

Airbus Chief Executive Tom Enders remained skeptical about the merits of a bid, not wanting to embark on another adventure without knowing the risk, after a cost debacle on the A400M transporter, sources familiar with the matter said.

Talk of extending the bid deadline has drawn the ire of Boeing's supporters in Congress, who are also incensed by a World Trade Organization ruling against Airbus funding.

(Editing by Sharon Lindores)

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