Citing four reasons for their decision, the U.S. Air Force
last month notified Congress that it intended to enter into negotiations with
Boeing to lease 100 767 derivative aircraft to replace the oldest of an aging
fleet of KC-135 tankers and rejecting a competing KC-330 tanker design
submitted by the European Aerospace and Defense and Space Co.'s (EADS) Airbus
According to the Air Force statement released March 28, the
results of its request for information from the two airframe manufacturers
"have clearly demonstrated that only the Boeing Corp. can currently meet the
requirements" of the FY02 Appropriations Act. Therefore, the Commercial
Derivative Air Refueling Aircraft (CDARA) team will proceed to negotiate a
lease with Boeing and develop a deal. The results will be reported back to
Congress in the summer of 2002."
The statement said the Airbus proposal "presents a
higher-risk technical approach and a less preferred financial arrangement." It
cited as reasons for the Air Force decision the opinion that EADS lacks
relevant tanker experience and needs to develop an air refueling boom and
operator station, making their approach a significantly higher risk; that a
comparison of the net present values of the aircraft recommended by Boeing and
EADS establishes Boeing as the preferred financial option; and that the size
difference of the EADS-proposed KC-330 results in an 81 percent larger ground
footprint compared to the KC-135E it would replace, whereas the Boeing 767 is
only 29 percent larger.
"The KC-330 increase in size does not bring with it a
commensurate increase in available air refueling offload," the statement said.
Finally, it added, the EADS aircraft would demand a greater
infrastructure investment and dramatically limits the aircraft's ability to
operate effectively in worldwide deployment.
"Representatives from EADS will receive a detailed debrief
on the results of our analysis," the statement concluded. "The [Air Force]
encourages EADS to continue their air refueling boom and other tanker
developmental efforts in order to ensure a vibrant and fully competitive global
defense industrial base well into the future."
In 2001 Congress had authorized the Air Force to negotiate a
multibillion-dollar, 10-year lease with Boeing as a first step toward replacing
the service's KC-135s, based on Boeing commercial 707 passenger aircraft. Some
of the tankers are now more than 40 years old.
"The KC-135 fleet is the backbone of our nation's global
reach," Air Force Secretary James G. Roche wrote in a letter to Sen. Patty
Murray, D-WA, last Dec. 7. "But with an average age of over 41 years, coupled
with the increasing expense required to maintain them, it is readily apparent
that we must start replacing these critical assets. I strongly endorse
beginning to upgrade this critical warfighting capability with new Boeing 767
Â However, when EADS officials complained about the sole-source
deal, the Air Force issued a "request for information" asking both Boeing and
Airbus to describe the type of tanker aircraft they would be able to provide
[MAT, Vol. 1, No. 1, page 52].
The Air Force's fleet of tankers, AWACS and RC-135
intelligence aircraft all are based on the B-707 airframe. Replacement of this
aging fleet could be a cash cow for both manufacturers.
"We are pleased to learn that the U.S. Air Force has
selected Boeing to move forward in their tanker-lease program," said Jerry
Daniels, president and chief executive officer of Boeing Military Aircraft and
Missile Systems, in a statement issued after the Air Force announcement.
"While this is just one step in a three-step process, it is
a very significant step.
"The selection validates the fact that the 767 tanker is the
most capable, most affordable and lowest risk solution to fill the Air Force's
urgent need to replace its aging tanker fleet," he added. "We have a lot of
work to do, and we look forward to the next step, completing our negotiations
with the Air Force. We know we have to meet their tough business and technical
expectations and are confident we can develop a program that provides the best
value for the Air Force and the taxpayer."
Once that is completed, Daniels added, the final step is
appropriate Congressional authority to finalize the lease arrangement.
U.S. Rep. Norm Dicks, D-WA, said he has urged the Air Force
to proceed quickly to negotiate the terms of the lease for Boeing 767 tankers.
Dicks serves as a senior member of that House Appropriations Committee and is a
member of the Defense, Interior and Military Construction subcommittees.
"Our current fleet of KC-135 tankers is more than 40 years
old and it is clearly in our best interests to replace them as quickly as possible,"
The Air Force announcement "reaffirms what we had said
throughout the legislative processâ??that only Boeing can meet the Air Forces'
high standards for air tankers; there is no other tanker manufacturer," said
Sen. Murray following th Air Force decision. "This is good news for the men and
women in uniform, and the men and women who build American planes. I sincerely
hope that the advocates for foreign plane manufacturers will finally
acknowledge that only Boeing can meet the tanker needs of the Air Force.
"Further, I hope that Boeing's critics will cease their
attacks on the Boeing Co. and the thousands of hard-working American men and
women who build the best airplanes in the world," Murray added. Murray said she
led an effort in Congress to replace outdated tanker aircraft with Boeing
tankers. While benefiting the Air Force, this will also provide jobs for
thousands residentsâ??and Murray constituents and votersâ??in the state of Washington.
"For months, Sen. [Maria] Cantwell [D-WA], and I have worked
with the Air Force and other Northwest delegation members to convince our
Senate colleagues to approve this measure," said Murray following the passage
of the appropriations bill in late 2001. "It is critically important for our
men and women in uniform who deserve the best equipment we can provide them, as
they carry out their dangerous missions."
Cantwell, whose constituents also will benefit from the
estimated 2,400 direct and 5,500 indirect hires the lease will provide, said
she applauds Murray's leadership in working with Sen. Daniel K. Inouye, D-HI,
and Sen. Ted Stevens, R-AK, to guide this proposal through the appropriations
"This is a huge economic win for our state," Cantwell said.
"This contract will put Boeing workers on the production line at a time when
the state's economy needs it most. At the contract's peak, the production of
767s would increase by 50 percent from current levels."
Gregory H. Bradford, president of EADS, Inc., told The
Washington Post on March 29 that Airbus officials knew all along that "being in
the game and certainly winning some of the first 100 tankers was a long shot."
The fact that the Air Force is now on record as encouraging Airbus to remain in
the tanker business and continue bidding on contracts, Bradford said, is a
victory for the company. At press time he had not responded to MAT's requests
for information about future EADS strategy to enter the U.S. military market.