Update: Defense News just published this article detailing the continuing problems Boeing has with the KC-767 Italian tanker, including the centerline hose-and-drogue problems we previously exclusively revealed in this column.
With Boeing and Northrop Grumman still in the Q&A stage with the USAF in advance of a Final Request for Proposals in the KC-X competition, we predict that Boeing will offer the KC-767 and not the KC-777.
- Boeing simply cannot afford another new airplane program right now. The KC-777 is only a concept airplane; Boeing would have to sink billions of dollars into the development of this derivative aircraft. The cost overruns and customer penalties for the 787 and, to a lesser extent, the 747-8, are already squeezing the company. Boeing is faced with the larger problem of potentially launching an entirely new airplane program in 2011-13 to replace the 777 to meet the forthcoming Airbus A350; or a enhanced derivative of the 777; and a re-engined 737 or a successor airplane, also within the 2011-2015 period.
- The company has billions in “sunk costs” in the KC-767 International program. Financially, it makes far more sense to offer this airplane to the Air Force.
- Offering a tanker based on the 777 will open Boeing to WTO issues. The European Community identified the 777 as a major beneficiary of “illegal” subsidies in its complaint to the WTO against Boeing. As long as US interests are attacking illegal subsidies provided Airbus on the A330-based KC-30 offered by Northrop Grumman, any 777-based tanker will similarly come under attack, assuming the WTO rules in the EU’s favor, as expected.
- The 767 is less likely to trigger WTO issues. Launched in 1982, the 767–although included in the EU’s broad-based complaint (if we recall correctly)–the amount of “illegal” subsidies, if any, pales to that alleged for the 777.
- Boeing still has development issues with the KC-767I (Italian) version. We understand the centerline hose-and-drogue system now is causing Boeing headaches. (Boeing declines comment.) Still, the last thing Boeing needs are the risks associated with an entirely new tanker in the KC-777.
- A Boeing executive spilled the beans and said publicly, in front of more than 100 people, that the company was “leaning” (his word) toward the 767.