Leeham News and Analysis
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Leeham News and Analysis
- Bjorn’s Corner: New aircraft technologies. Part 31. Detailed design -3 September 22, 2023
- The Airliner Production Problem, Part 2 September 21, 2023
- Pontifications: IAM 751 gearing up for Boeing contract talks in 2024 September 19, 2023
- Analysis: Labor issues continue to challenge aerospace industry September 18, 2023
- GE Aero sees growth through 2026, despite supply chain snags September 15, 2023
Tanker competition decision expected later this year
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By Scott Hamilton
May 29, 2023, © Leeham News: Procurement of a new round of US Air Force aerial refueling tankers resulted in a shift in strategy driven by new threat assessments, a service spokesperson tells LNA.
The Lockheed Martin LMXT concept. Credit: Lockheed Martin.
“The Next Generation Air-Refueling System (NGAS) is being accelerated due to threats. Therefore, the Air Force is no longer pursuing the original envisioned tanker strategy,” an Air Force spokesperson said in an email on May 22.
Boeing KC-46A. Credit: Boeing.
“However, we know that between KC-46A (179 aircraft on current contract) and an accelerated NGAS, we still need uninterrupted tanker recapitalization. Therefore, we are working on validated requirements and a finalized Business Case Analysis (BCA) for this tanker before making a final decision later this year whether or not we’ll hold a competition for aircraft (approximately 75) as the gap filler to ensure uninterrupted tanker recapitalization. Andrew Hunter, the assistant secretary of the Air Force for acquisition, technology, and logistics provided this update on March 7 during a media roundtable at the AFA Warfare Symposium.”
Initially, the Air Force posited that the next round of tanker contracts would be for around 160 aircraft. Originally, the procurement, called KC-Y, was expected to be an advanced tanker design. Then it shifted to a “bridge” procurement for an existing tanker. Now called NGAS, the procurement concept is reduced to 75 tankers.
Boeing favors a sole-source, follow-on order. Unsurprisingly, Lockheed Martin Co. (LMCO) favors a competition.
Boeing currently has contracts for up to 179 767-based KC-46As. Airbus has delivered about 50 MRTTs worldwide. Boeing has delivered more than 60 KC-46As worldwide, nearly all so far to the USAF.
Related Articles
- Making the case for competing the USAF tanker procurement
- Looking ahead toward tanker procurement: Boeing vs Lockheed
Pontifications: Looking ahead to a major Defense procurement: Boeing vs Lockheed-Airbus
By Scott Hamilton
May 23, 2023, © Leeham News: Decisions by the US Air Force in Washington (DC) on whether to require competition for its next round of aerial refueling tanker aircraft are still months away.
But so far, the USAF technical group at the Wright-Patterson Air Force Base in Dayton (OH) is proceeding as if there will be a competitive battle. At stake is an order for more than 160 tankers.
Boeing thinks this will be a sole-source, follow-on order for its KC-46A, based on the commercial 767-200ER. Lockheed Martin Co (LMCO), partnering with Airbus, wants to see a version of the Multi Role Tanker Transport (MRTT), based on the commercial A330-200.
So far, the secretary of the Air Force publicly said he is leaning toward a sole-source follow-on order.
I visited LMCO last month to talk about the tanker competition. We also talked about the C-130J and its new commercial model, as well as other defense programs.
Making the case for competing the next USAF tanker procurement
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By Scott Hamilton
May 22, 2023, © Leeham News: The US Air Force is moving slowly toward another aerial refueling tanker procurement. With hundreds of ancient Boeing KC-135 tankers still to replace, the procurement will be a big one: more than 160 jets.
Concept of the Lockheed Martin LMXT aerial refueling tanker it wants to sell the US Air Force. This tanker is based on the Airbus A330 MRTT now in service. Credit: Lockheed Martin.
The big question that is as yet unresolved is whether the Air Force will place a follow-on, sole-source order with Boeing, or seek a competitive bake-off. If it’s the latter, a bid by Lockheed Martin Co. (LMCO) will be the competition. (Others may submit a bid, but the Boeing-Lockheed face-off will be the one to watch.)
LMCO partnered with Airbus to offer the A330 MRTT (Multi-Role Tanker Transport). This sets up a third Boeing-Airbus contest that could well be as bitter as the two previous ones. Make no mistake: although Lockheed will be the company submitting the bid, Airbus will become the target. It already has. Boeing surrogates lost no time in attacking Airbus after LMCO announced it will submit a bid, using the same old tired illegal subsidies claims and adding some new ones.
One surrogate questioned Airbus’ safety record. This was an astounding line of attack, considering the Boeing 737 MAX history and all the scandals that emerged in its development; and the 2013 grounding of the Boeing 787 for safety reasons. Airbus has never had a fleet type grounded by regulators for safety reasons traced to the design of the aircraft. (India’s regulator grounded A320neos equipped with Pratt & Whitney GTF engines due to issues related to the engine durability.)
More relevant is whether it makes economic and financial sense for the Air Force to have two primary tanker fleets: Boeing’s KC-46A and the A330 MRTT. LNA visited LMCO last month in Marietta (GA), the location of much of its defense business. It’s where the LMXT, as Lockheed calls its offering, will be militarized after production at Airbus’ Mobile (AL) aerospace complex should LMCO win the contract—if the procurement is competed.
LNA tomorrow will discuss some of the history of previous procurements.
Summary
- Commonality is Boeing’s argument. Derisking the fleet and greater capability is Lockheed’s argument.
UPDATE: Calhoun upbeat on cash flow despite fifth consecutive quarterly loss
By Bryan Corliss
Oct. 26, 2022, (c) Leeham News: The Boeing Co. posted a loss from operations of nearly $2.8 billion for the third quarter, citing losses on fixed-price defense development programs that offset an overall 4% growth in revenues.
The consensus of Wall Street analysts earlier this week was that Boeing would announce profits of 13 cents a share and would break a streak of four consecutive losing quarters. Instead, Boeing posted a loss of $5.49 a share.
However, in a conference call with stock analysts later in the morning, Calhoun was upbeat, emphasizing Boeing’s positive operating cash flow of nearly $3.2 billion for the quarter.
“This quarter was a big one for us,” he said. “We hit a marker … to generate positive cash flow.”
Boeing booked losses of roughly $1.95 billion on two defense programs, CFO Brian West said: KC-46 tankers and new Air Force One presidential transports. Both are fixed-price contracts for commercial jet conversions that forced Boeing to eat any cost overruns.
“We aren’t embarrassed by them,” Calhoun said. “They are what they are.”
But in an interview with CNBC’s Phillip LeBeau Wednesday, Calhoun said Boeing will not do fixed-price defense contracts in the future. “That is not our intent.”
Summary:
- BCA: 737 and 787 deliveries resume; engines in short supply
BDS: ‘Labor instability’ hurts key programs
Calhoun: Boeing ‘supports China’ but is re-marketing planes
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Boeing sees incumbency as advantage in coming air force tanker procurement
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- The interview with Lockheed Martin appeared Jan. 30.
By Scott Hamilton
KC-46A. Source: Boeing.
March 21, 2022, © Leeham News: Lockheed Martin Co. (LMCO) plans to submit a proposal for the US Air Force’s KC-Y aerial refueling tanker procurement. So does Boeing. LMCO joined with Airbus and will offer a tanker based on the existing Airbus A330 MRTT (Multi-Role Tanker Transport). Boeing will offer a follow-on purchase of the incumbent KC-46A, based on the 767-200ER.
These two aircraft faced off in the KC-X competition. Airbus initially teamed with Northrop Grumman and was awarded the contract. Boeing protested the award on procurement procedural grounds and prevailed. Northrop dropped out of the recompete, which Boeing won in 2011.
The two aircraft will be offered again, but this time, one party doesn’t view the aircraft as competitive. LMCO sees the Airbus airplane, which it brands the LMXT, as complementary to rather than competitive to the KC-46A. Lockheed explains why here.
Boeing, on the other hand, isn’t convinced the USAF will even seek a competitive bid—or that LMCO’s belief that the service wants a larger airplane than the KC-46A to fill a “gap” is correct.
Mike Hafer, senior manager of KC-46A Business Development, explains why.
Pontifications: Advice for Boeing in the coming KC-Y campaign
Part 6: The KC-X competition from Boeing’s perspective
By Scott Hamilton
Feb 21, 2022, © Leeham News: Jim Albaugh, the former president and CEO of Boeing Commercial Airplanes and of Boeing’s defense unit, retired from the company in 2012. He oversaw the first competitive bid at the defense unit for the US Air Force KC-X refueling tanker. That was lost to Northrop Grumman-EADS (Airbus) in 2009.
As CEO of BCA, he oversaw commercial efforts to get Boeing’s cost down on the 767-200ER, which formed the basis for what became the KC-46A tanker. Defense won this round against a solo EADS bid. Boeing’s winning price was about 10% below the EADS bid for its A330-based MRTT.
Years removed from Boeing but nevertheless an interested observer with experience on the losing and winning bids, Albaugh has some observations and advice as Boeing prepared to compete against Lockheed Martin-Airbus for the KC-Y campaign that already has unofficially begun.
Pontifications: Rerunning the KC-X campaign as Technically Acceptable, Lowest Price process
Part 5 in a Series: the Boeing perspective in the last KC-X campaign
Feb. 14, 2022, © Leeham News: After the Government Accountability Office (GAO) upheld Boeing’s protest over the US Air Force contract award to Northrop Grumman-EADS, the parties regrouped to consider whether or how to compete for the KC-X contract again.
By Scott Hamilton
Boeing was discouraged after the Northrop win. According to press reports at the time, US Rep. Norm Dicks, a Democrat from Bremerton (WA) since retired, encouraged Boeing to make another bid. The US Air Force recast the new procurement to a pass-fail process on the requirements, emphasizing the price. The process was known as Technically Acceptable, Lowest Price, or TALP. Northrop decided to drop out. EADS, despite concluding the odds were long that it could win, went ahead.
In September 2009, the Air Force began the new procurement process. The same month, Jim Albaugh moved from Boeing’s defense unit, where he had been president and CEO, to Boeing Commercial Airplanes, in the same position. Although no longer involved day-to-day in the KC-X campaign, Albaugh nevertheless was in a good position to recall how Boeing approached this round.
HOTR: Lockheed Martin to split refueling tanker work between Airbus-Mobile and LMCO Marietta facilities
Jan. 31, 2022, © Leeham News: Assembly and conversion of the proposed LMXT refueling tanker for the US Air Force will be split between Mobile (AL) and Marietta (GA), Lockheed Martin (LMCO) announced today.
Airbus has final assembly plants for the A220 and A320 families in Mobile. LMCO has surplus facilities at its home in Marietta. A new final assembly plant and line will be required at Mobile. LMCO’s C-5 building in Marietta will be the site for the conversion and installation of military equipment.
“We will transition the assembly line for the A330s to the United States and transitioning all conversion lines from Spain to the United States,” said Larry Gallogly, director of the LMXT program. The A330 tooling and production lines moved to the US are for the A330ceo only; A330neo production remains in Toulouse. A330 MRTTs ordered by non-US customers will be assembled and militarized at the current facilities in Toulouse and Spain.
NIAR, partners offer tanker-converted 777-300ER PTF to US Air Force
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By Scott Hamilton
Jan. 31, 2022, © Leeham News: A third company will offer a tanker to the US Air Force when the KC-Y Request for Proposal is issued this year.
Kansas Modification Center (KMC) and the National Institute for Aviation Research (NIAR) will propose converting used Boeing 777-300ERs to tankers. Jim Gibbs, president and CEO of KMC, already submitted information to the Air Force in response to last year’s Request for Information.
A retired B-1 bomber acquired by NIAR for research. Credit: Wichita State University.
Gibbs, in an interview with LNA, said that the concept is to offer the Air Force a tanker not for front-line combat zones, but along the lines of the conversions used by Omega Air. Omega provides non-combat air refueling service for the US Navy, Air Force, and some NATO countries. It operates after-market conversions of the Boeing 707 and McDonnell Douglas DC-10. IAI Bedek also undertook after-market tanker conversions of the 707 and Boeing 767. The UK’s Royal Air Force converted Vickers VC-10s and Lockheed L-1011s to tankers.
Choosing the 777-300ER
Gibbs said the KMC and NIAR chose the 777-300ER over the 777-200ER or LR as the better platform, in their view.
“The 777, especially the -300, makes an enormous amount of sense right now. It’s a modern aircraft, very low time, the aircraft itself can haul about 200,000 pounds on a structural payload with very minor modifications to it,” Gibbs said. “You can take that aircraft, add some existing capabilities on it, such as the existing boom of KC-135, and simplify the fuel offload process. I think you would have a very capable tanker. If you have a mission radius of 3,000 miles, a 777 can still offload 150,000 pounds of fuel.
“The -300ER has a higher gross weight than anything, with the exception of the -200LR. If you look at the available aircraft for conversion and the available feedstock on it, the LR and the type of aircraft available for that are very minimal compared to the -300ER feedstock. The -300 is a bigger aircraft, it shares the same wing box and a lot of structure with the -200, or most of the structure, besides the plugs. We need to inject 100 tankers into the fleet. There’s not that many -200LRs out there,” Gibbs said.
Pontifications: “The mother of the last pilot on the 707 tanker hasn’t been born yet”
Part 3 of the Boeing focus for the USAF Aerial Refueling Tanker
Jan. 31, 2022, © Leeham News: Following the 9/11 terrorist attacks in the United States, Boeing offered the US Air Force a lease deal for 100 aerial refueling tankers based on the 767-200.
By Scott Hamilton
The concept of leasing tankers had been floated before. Boeing at one point proposed creating a 747-based tanker and leasing it to the Air Force. The idea went nowhere, but this one gained traction.
The leasing concept formed just before Jim Albaugh arrived at IDS, but he was president as it progressed and through the subsequent competition, called KC-X, against Northrop Grumman-EADS (Airbus) after the lease deal was canceled.
“You go back in history, and it started out with the need for the Air force to replace the 707s which were their tanker fleet for a long time, and they were getting old,” recalls Albaugh, the CEO of Boeing’s Integrated Defense Systems unit at the time. IDS is now called Boeing Defense, Space and Security (BDS).