Update, 6:00PM Paris Time:
By now readers probably have seen the news from the Air Show on this topic: Boeing is prepared to offer either a 777-based tanker or a 767-based tanker, depending on the RFP requirements. Bloomberg News has a good summary of the IDS briefing on this topic. It may be found here. As far as the factual reporting goes, we don’t have anything to add to the Bloomberg piece. There is a full tanker briefing tomorrow, at which the media has been promised more detail.
Barring any more downpours like we had today to further dampen the spirits of aviation, we will be there..
This is the second in a series of articles from the EADS Media Day and the Paris Air show….
There was an interesting buzz at the Aerospace Journalist of the Year Awards dinner on the eve of the launch of the Paris Air Show.
Word was circulating that Boeing will announce at its Integrated Defense Systems briefing at 11 am June 15 that the company is prepared to offer the USAF a tanker based on the 777-200F should the new Draft Request for Proposals outline requirements for a larger medium tanker than Boeing’s previous KC-767-200AT offering.
Boeing IDS officials at the aerospace dinner steadfastly refused comment. In a piece we posted last Wednesday, we reported that Boeing has used the last year to undertake R&D on the 777, 767-400 and 767-200LRF platforms.
Prior to the start of Round 2 of the KC-X competition, Boeing had shown concepts based on the 777, but in the end went with its KC-767. At the Farnborough Air Show last year, we asked Boeing about the prospect of a KC-767-400 and the company replied that the lengthy fuselage, equipped with a refueling boom, limited take-off rotation and thereby meant a longer runway requirement than the then-RFP called for.
Even the KC-767-200AT had runway issues, while the Northrop Grumman KC-30 met the runway length requirement. A KC-777 will also require more runway than was in the Round 2 RFP.
Before the start of Round 2, we opined that Boeing could checkmate Northrop and the EADS/Airbus consortium if it offered a combination of the KC-767 and KC-777 to the Air Force. If the buzz at the awards dinner is accurate, Boeing may be about to do just that.
I don’t understand. Do you mean that Boeing will offer both the 777 and 767 as a base for the KC-X? Or one for KC-X and the other for KC-Y?
Multi-role or not, would not the 777 be way too big for the KC-X? I mean certainly one can argue that bigger is better but as with so much in life, there has to be a limit somewhere.
On another vein, while re-reading your article from January, 2007, it came to me that nothing has been heard about the WTO case between the US and the EU. Was there not supposed to be some decision on the case of the US complaint?
I read it as they may offer a mix of 777s and 767s to the USAF, not exclusively one or the other, as Scott notes in the last paragraph. This is a smart move.
How on earth offering two planes for the job that one should performed can be called a checkmate?
This is more desperation-mate!!!
The issue is that Boeing does not have the plane to beat the A330-200. During the last competition, Northrop/EADS, was even priced lower than the Boeing offering while offering 30% more capacity and everything else.
Actually, Otis, this is more aptly characterized as “desperation”. From an excellent report by DOD Buzz.
“But there are rumors that Northrop is weighing its commitment to the tanker program, which has cost the company financially and politically. Two sources have told me that Ron Sugar, the company’s CEO, will walk away from the competition should the new RFP appear weighted too heavily in Boeing’s favor. This could, of course, be part of the company’s gaming efforts to ensure that the Air Force does include analysis such as best value as it makes its choice.”
Otis, the GAO report concluded that Boeing had the lower cost.
The KC-30 capacity is not required for every mission, or most missions in fact. The offering of the KC-777/KC-767 mix would provide the flexibility to use the large aircraft when mission needs dictate. Same as the KC-10/KC-135 mix. This is not a “one size fits all” scenario.
We can add some color to the comments above.
To John: WTO is playing soldier: hurry up and wait. Airbus and EADS told us a WTO decision may come down on the Boeing complaint this summer (just in time for the DRFP, though this would be a coincidence in timing). It’s not clear when the Airbus complaint will come down, but it was filed about six months after the Boeing complaint.
To Aurora’s first 0846 AM post: Northrop’s threat outlined above is seen purely as posturing once again by Boeing officials, similar to the threat as the Round 2 DRFP was prepared. What we hear more seriously is that Northrop and EADS are very concerned that Boeing received Northrop’s pricing information in the GAO protest, but the Air Force and GAO won’t give Northrop Boeing’s pricing. NGC and EADS believes this puts them at a huge competitive disadvantage, and if this isn’t remedied, they could file a protest on the DRFP and/or even file a lawsuit. They believe that have grounds for litigation.
Boeing maintains that the lawyers got the pricing information and there was then and is now a firewall between the lawyers on IDS/BCA on this matter that has not and will not be breached. NGC/EADS is known to be skeptical of this assurance.
We think Boeing, if not checkmating NGC by having two planes to offer (but only one at a time, as opposed to a check-mating dual offer), this gives Boeing a tremendous advantage and shifts the NGC into a defensive strategy.
How’s this for timing? Boeing says A350 aid would violate WTO rules. Posturing?
I know this suggestion is/was/will be anathema to many, but the only way out of the predicament that the USAF finds itself is to go with Boeing via a sole source. Any pretense at competition will only serve to delay this thing further. Another airbus win would likely be protested and the Congress is sure to push back mightily. A Boeing win would lead to a NG protest.
It is a MESS and the only way out of the mess I’m afraid is to give KC-X to Boeing. It won’t please everyone of course, but it will offend fewer numbers of the people that actually pay the bills.
since nobody else has bitten, I will ask the question. Could you please tell me the logic of your comment?
After an attempt to do the sole source contract with Boeing (and screwing it up on both sides) the USAF did a competition. Something that should have been done from day 1. Why the initial sole source was allowed in the first place should be a question all should be asking but nobody is!
Now on the eve of the release of a DRFP for the second attempt of a competition, you suggest throwing out the comeptition and going back to plan A with Boeing?!?!
With the money Airbus and Northrop win from the resulting lawsuit, Airbus could go ahead and build their much, by Boeing, feared Mobile factory even without the tanker contract.
The AF and Gates repeatedly said that they don’t want a two-aircraft KC-X. The expected production rate is based around $3 billion or so a year in funding. They’re thinking in terms of 12-15 aircraft a year. They’re not going to pay two makers to deliver 6-8 aircraft a year. They also don’t want to have to pay for two development programs, two logistics systems, two training systems, etc. It might be different if they were planning on buying 40-50 aircraft a year. But that’s a budget buster.
Make no mistake.
The WTO will NOT rule against Airbus subsidies.
And the 767/777 dual offering?
The risk is that neither conforms to the RFP better than the A-330. The fear is the RFP comes out customed designed to fit A-330 like a glove.
Some people, when talking about illegal subsidies, might want to consider the present day situation.
Even if the WTO rules against the EU (My question is, if the U.S. had an agreement with the EU, how could they retrocatively complain about the EU follwing this agreement?), what will the impact be in todays economic environment?
Would the U.S. start imposing tariffs? What would the reaction from the EU be?
What if the EU wins in their case against the U.S. (something which could be more likely)?
Would they start imposing tariffs on the U.S.?
It all seems rather unlikely to me.
Additionally, the U.S. led worldwide economic disaster has given Airbus the excuse to go for A350 launch aid. Can you picture the U.S. launching another WTO action against the EU immediately after the multibillion dollar payout made to U.S. businesses and industry in the last 9 months?
John, short answer is that Congress has the authority to mandate sole source for this procurement. Any attempt at “competition” is going to result in war without end. As I noted before here, had the USAF selected the KC-767 on 02-29-08, I think it highly likely there would be funding in place for a tanker as we speak.