Australian Aviation has this story about an in-flight incident during a refueling test between the Airbus KC-30A and an F-16. Readers will recall a Boeing KC-767J for Japan Air Defense Services had an incident in which the boom wouldn’t retract for landing and was damaged on the runway, the point being both programs have now suffered incidents.But the KC-30A incident will likely further delay delivery of the plane to the RAAF; it is already two years late. The timing couldn’t be worse for EADS, with the contract award for the USAF only weeks away.
- Bloomberg News followed with this story.
- FlightGlobal has this story.
- Meanwhile, there is this story that Boeing is taking a pass on bidding for the Indian government tanker contract. A second story says uncertainty over the USAF contract outcome is why. A third story has more detail.Defence Statement, 20 January 2011 from the RAAF:
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EADS CEO Louis Gallois went public today in Europe with his prediction that the USAF will award a tanker contract next month. The best and final bid will be submitted this month.
We previously noted that the final bids were due this month and a contract award expected next month.
Meanwhile, here is an interesting story on the tanker from KING5 TV in Seattle, with this piece.
As readers know, the competition is a price shoot-out. As the KING story notes, Boeing continues to be worried about the benefit EADS has from subsidies found to be illegal by the WTO on the ability to under-price Boeing, but as we noted in this post last year, WTO may not have the effect Boeing fears; the withdrawal of Northrop Grumman as a partner to EADS has a much larger benefit to EADS’ ability to price the airplane.
Update, Dec. 9, 5:00 AM PST:
Politico has this profile on Loren Thompson.
Flight Global reports Brazil may select the KC-45 to replace its Boeing KC-137 (KC-135).
Update, 5:00 PM PST: Dominic Gates now has his story on this topic here.
George Talbot of The Mobile Press Register posted this story today in which Loren Thompson, an aerospace defense analyst who has done work for Boeing, says Boeing has concluded EADS is going to win the KC-X tanker competition.
In Talbot’s article, Thompson once again advances the Boeing line about WTO and Airbus’ illegal subsidies as evidence of a USAF “bias toward EADS.”
There is just one problem with this line of allegation with respect to the WTO issue:
US law doesn’t allow the USAF to take the WTO panel finding into account, and Thompson, Boeing and its Congressional supporters know it.
Update, Dec. 1: George Talbot of The Mobile Press-Register has this interesting interview with Michael Wynne, a former top defense department procurement official, who suggests a solution to the KC-X quandary.
Also, at 12:50pm PST: Bloomberg has this story with Boeing BDS CEO Dennis Muilenberg weighing in. It seems the USAF has more ‘splainin’ to do.
Update, Nov. 30, 8PM PST: The New York Times confirms EADS opened Boeing data, Boeing did not; Boeing threatens protest.
Dominic Gates at The Seattle Times has this report.
In what is a wholly transparent move, Boeing is beginning to lay the groundwork for an appeal in the event EADS wins the KC-X contract.
Loren Thompson of the Lexington Institute, published a commentary yesterday (we only saw it today) entitled “Tanker flap reflects pattern of bias.” In it he makes several allegations, the most serious of which is that EADS read the proprietary document mistakenly sent by the USAF to EADS about Boeing performance data of the KC-767 but Boeing did not read the EADS document and data sent to Boeing by USAF. Thompson does not disclose how he knows this.
We attended a press conference today in Washington (DC) with Sean O’Keefe, CEO of EADS North America, that covered a variety of issues but focused mainly on the KC-X tanker competition and most particularly the news last week that the USAF had sent proprietary information about the Boeing and EADS tanker bids to the wrong company.
First, O’Keefe remains in the neck collar from his near-fatal airplane accident in Alaska August 9 in which former Sen. Ted Stevens (R-AK) and three others were killed. Sean and his teenage son, Kevin, were about five survivors. O’Keefe’s spirits are good and he expressed that the random nature of those killed and who survived is proof that divine intervention is “real.”
Having interviewed O’Keefe on previous occasions, we are gratified to see his recovery progressing and him back at work.
Here is a quick snaphshot of O’Keefe’s remarks:
Update, Nov. 17: EADS now is predicting the tanker contract award will slip to next year. This is entirely consistent with what we have been hearing (first quarter) and what we understand Boeing believes as well.
A shortage of KC-135 refueling tankers, because of the high demand in Afghanistan and Iraq, forced the Air Force to cancel Red Flag, an annual exercise.
Strategy Page has a couple of obvious errors in its analysis, but the overarching point is well taken.
This illustrates the need for aerial tankers and how warfighting capability can be affected by a shortage of tankers. While the exercise was not canceled due to aging tankers, but rather competing interests, the point is nonetheless made.
The election results could have a major affect on the KC-X tanker competition.
The headlines are:
- The Republican takeover of the House means Norm Dicks (D-Boeing/WA) loses is chairmanship of the House Appropriations subcommittee on defense, a position from which he could conceivably block any funding of a USAF award of the contract to EADS;
- Todd Tiahrt (R-Boeing/KS) lost his primary bid to move over to the US Senate, so he’s out of Congress altogether. This is a key Boeing ally.
- Patty Murray (D-Boeing/WA) widened her razor-thin lead in Washington State over Dino Rossi (R). Although Rossi fumbled a key question about the tanker competition during the race, there really was never any doubt that Rossi would support Boeing’s bid. But if Murray wins her fourth term, and the Democrats retain control of the Senate, both of which now appear likely, Boeing retains a powerful voice in the Senate to block any EADS contract; Continue reading
We have been told by two sources, including one that is very close to the competition, that the Air Force is likely to announce a new delay soon in evaluation and award of a contract in the long-running KC-X tanker competition.
One source says the delay will be until the first quarter; the other didn’t have a new timeline but said the USAF was preparing to notify the competitors any time now.
The Hill, a specialty publication reporting on matters of “the Hill,” aka Congress, reports today that the chief of the US Air Force won’t confirm selection of the winner for the KC-X program will be selected this year.
Heidi Wood, the aerospace analyst at Morgan Stanley, concluded some time ago that the selection would slip to 2011. There have been previous hints at this.
Also while we were on holiday: the Government Accountability Office rejected that final elements of the protest by US Aerospace for its late filing of a bid. We don’t think this silly proposal wouldn’t have gained traction even if the filing had been on time. This leaves Boeing and EADS as the only bidders for the KC-X.
Here is a link to a piece we did for Armed Forces Journal magazine’s October issue.
- EADS reveals its study–countering two Boeing-commissioned reports–about fuel usage of the KC-45 vs the KC-767;
- EADS says it delivers more bang for the buck than Boeing;
- Flight Global has a good story detailing some of Boeing’s KC-767’s technical specifications;
- Boeing is prepared to deliver its first two KC-767s to Italy by year-end, at long last, five years late.
After two years and two studies commissioned by Boeing promoting the KC-767 as less costly to taxpayers over a 40-year period, EADS has provided its analysis to us of the operating costs of the EADS/Airbus KC-45 tanker vs. the Boeing KC-767. The EADS analysis rebuts the two studies commissioned by Boeing in support of its tanker bid.
EADS and before it went solo, Northrop Grumman, has largely ignored the Boeing studies other than to generally dismiss the veracity of them. In doing so, both said the USAF would run its own analysis and determine the KC-45 delivered more bang for the buck, which is what happened in the 2008 competition won by Northrop. The KC-45 achieved an IFARA (efficiency) score of 1.9 vs. 1.71 for the KC-767.
But EADS and Northrop missed the point of the Boeing studies, and that was to influence Congress, not the Air Force. EADS finally got it, and released the following data.
EADS’ internal study, based on requirements and criteria in the USAF Request for Proposals, says the KC-45 will use 3% less fuel per gallon of fuel delivered on refueling missions than the KC-767 on 500nm trips and 31% less on 2,500nm trips. Thus, using USAF criteria, EADS says on a 2,500nm mission with 250 sorties, the KC-45 will save about $25.8m in one day alone, based on assumed fuel-per-gallon pricing disclosed by the Department of Defense.
Using USAF Net Present Value criteria in the RFP; 500nm increments for missions, and other factors, EADS ran several different scenarios with variable factors based on RFP criteria and concluded that mission-driven factors—and not solely training scenarios on which Boeing studies are essentially based—means the KC-45 $1.37bn to $16.5bn on an NPV basis over the 40 year life cycle.
This compares with Boeing’s AeroStrategy study that concludes the KC-767 saves taxpayers $11bn-$36bn over the same period, but not on an NPV basis.
EADS uses USAF criteria and the cost to deliver a gallon a fuel as the basis for its study compared with the Boeing approach, using commercial airline fuel consumption data filed with the US government.
The distinction compared with Boeing’s methodology is important, as we will explain. Continue reading