The U.S. Air Force has awarded a $35-billion contract to Boeing Co. to (NYSE: BA) build a fleet of aerial fueling tankers in favor of its rival EADS (European Aeronautic Defense and Space Co.) ending a three-year epic battle, according to a report in The New York Times, quoting politicians and industry executives.

Boeing officials has previously worried that its 767 jetliner-based tanker would be compared unfavorably to EADS’ bigger aircraft, itself a modified version of the Airbus A330 passenger jet.

The order calls for 179 airplanes, which Boeing is expected to assemble at its plant in Everett, Wash. And transport them for final fitting at its facility in Wichita, Kan.

Boeing estimated the contract will create 50,000 direct and indirect jobs in the U.S.
Despite a diminishing military budget overall, the value of the tanker deal could ultimate rise to $100-billion

The contract could still lead to a fight in Congress since EADS had promised to open plants in Alabama and Ohio (and thereby create thousands of desperately-needed jobs itself).

In fact, back in 2008, EADS and Northrop Grumman (NYSE: NOC)m had been awarded this contract, but it was rescinded after Boeing complained about the subjective criteria the Air Force used in its consideration.

Northrop withdrew from the bidding last year leaving EADS and Boeing as the lone combatants for the contract.

Boeing had also protested that EADS could receive subsidies from various European governments to undercut Boeing.