The Boeing Co. has been awarded an initial $3.5 billion contract to produce 18 aerial refueling tankers for the U.S. Air Force, CNNMoney.com reported.

The 10 percent down payment is part of an overall $35 billion contract for 179 aircraft.

Both Boeing and the North American division of the European Aeronautic Defense and Space Co. (EADS), which manufactures the Airbus, bid for the contract, estimating it would support thousands of jobs.

On Wednesday, Gulf Coast state governors sent a letter to President Barack Obama, saying their states’ economies would be significantly improved if the contract were awarded to EADS.

On Feb. 1, Iowa Gov. Terry Branstad wrote a letter to Secretary of Defense Robert Gates in support of Boeing, saying that awarding the contract to that company would create more than 60,000 U.S. jobs.

“I am writing to you today to voice my strong support for the Boeing Co. as a recipient of the Department of Defense contract to rebuild the U.S. Air Force’s fleet of aerial refueling supertankers,” Branstad wrote. “This project will provide Americans with an economic boost and ensure job creation when needed most.”

Boeing, which employs more than 155,000 people in the United States, plans to construct the aircraft in Everett, Wash., and Wichita, Kan., CNNMoney.com said. EADS would have based its production facilities in Mobile, Ala.

Dennis Muilenburg, CEO of Boeing Defense, Space & Security, said the project will support more than 50,000 jobs and 800 suppliers in 40 states.