A federal appeals court has reversed a ruling that overturned Boeing Co.'s $1.1 billion contract for maintenance of an Air Force refueling tanker jet.

The decision Tuesday by the U.S. Court of Appeals for the Federal Circuit reinstates Chicago-based Boeing's 10-year contract for work on the KC-135 Stratotanker — the Air Force's primary mid-flight refueling aircraft.

Boeing, which built the KC-135, was awarded the maintenance contract in September 2007. The company had already held similar contracts for nearly a decade.

But rival bidder Alabama Aircraft Industries Inc. filed suit, claiming the contract was not properly awarded to Boeing, citing issues such as pricing and past performance. The U.S. Court of Federal Claims ruled for Alabama Aircraft Industries in 2008 and ordered the Air Force to re-solicit bids for the maintenance deal.

Boeing spokesman Dan Beck said the company is pleased with the decision and that Boeing looks forward to beginning work with the Air Force.

An Alabama Aircraft Industries president Ronald Aramini said in a statement that the company was disappointed with the ruling and that it "will be reviewing all legal and strategic options available to us."