South Korea on Tuesday announced the start of the official bidding for a refueling aerial tanker project worth 1.48 trillion won ($1.26 billion), with three foreign major defense firms among the candidates.

Seoul's plan to purchase four refueling tankers has drawn interest from three aerospace giants: Europe's Airbus Defense and Space, Boeing of the United States and Israel Aerospace Industries of Israel.

"The price bidding will continue until the end of this month,"

said an official of the Defense Acquisition Procurement Agency. "Price will account for around 20 percent of the total criteria."

After wrapping up the evaluation by next month, the agency is scheduled to choose the winner and make a contact in June, according to DAPA officials.

Two tankers are then to be put into service in 2018 and the remaining two in the following year. The delayed process of selecting a successful bidder for about a year has forced the military to postpone its original target of 2017.

"The exchange rate will be one of the key variables in this process," an industrial watcher said. He refused to be identified.

"The recent decline in the euro against the greenback would be good for Airbus and weigh on Boeing." 

The use of tankers allows fighter jets to stay airborne for an extra hour and carry more weapons. The greater payload is made possible because the jets can take off with less fuel, thereby lightening their weight.

The A300-based Multi-Role Tanker Transport tanker by Airbus is known for meeting both air-to-air refueling and air transport demands required by the South Korean Air Force. Some 10 countries have decided to adopt 60 platforms, which have been fully developed and already been in service.

Boeing's KC-46 tanker that features high combat readiness is expected to provide South Korea with interoperability with the U.S.

Air Force, according to its officials, adding that the size is suitable for the refueling mission, which reduces infrastructure and operations costs in the long run.

As a renovated version of the B767-300ER plane, the IAI's MRTT is feted for its cost effectiveness, with the company vowing to transfer relevant high technology to South Korea. (Yonhap)