In recent weeks, strong headwinds have buffeted the Air Force’s plan for acquiring 100 Boeing KC-767 tankers. Sen. John McCain (R-Ariz.), a relentless critic, forced a fundamental change in the original deal, the net effect of which was to saddle USAF with onerous up-front acquisition costs.
Next, Boeing went public with allegations of improper contacts between a top executive and a former Air Force official who had handled the tanker deal. Defense Secretary Donald H. Rumsfeld put the plan on hold pending an investigation. Finally, Sen. John Warner (R-Va.), chairman of the Senate Armed Services Committee, announced plans to hold hearings, raising the specter of more delays—or worse.
As the new year approached, the tanker plan seemed in danger. Some worried that the financially strapped Boeing might be forced to shut down its 767 line in Everett, Wash.
The consensus was that these problems probably would be finessed and cause no lasting damage. That may be so, but sudden uncertainty in such a critical program was worrisome.
To begin with, it would be hard to exaggerate the importance of maintaining a healthy fleet of aerial refuelers. They are key to the US ability to project military power. Tankers are used to refuel fighters, bombers, airlifters, and support aircraft, greatly extending the reach of US forces.
Operations in the Gulf, Balkans, Afghanistan, and Iraq relied heavily on tankers. The Air Force isn’t the only customer, either. In the Afghanistan war, 55 percent of all fuel delivered in the early weeks went to Navy aircraft flying off carriers.
In the future, the US may be even more dependent on tanker support, given a decline in forward bases.
However, for all their importance, most tankers are old, costly to maintain, and frequently out of service. USAF’s fleet of tankers consists of 544 KC-135 aircraft (133 E models and 411 more-modern R models) and 59 KC-10 aircraft. The average KC-135 is 43 years old—an artifact of the Eisenhower era.
They are shot through with structural maladies. Corrosion is the biggest problem, accounting for half of all KC-135 maintenance. This has led to rising repair costs, more time in depot, and decreasing availability.
Until recently, the problems were viewed as manageable. USAF did not plan to begin replacing KC-135Es until 2010 and expected to keep some KC-135Rs in service until 2040.
The Sept. 11 terrorist attacks changed the calculus. Wars in Afghanistan and Iraq and combat air patrols over US cities caused great wear and tear on the KC-135s. The Air Force, faced with new risks and huge costs, made replacement a priority.
The idea of converting 767s into tankers dates to early 2001, when Boeing proposed to convert 36. In the wake of Sept. 11, the idea was revived and expanded to 100 aircraft. It also came with a twist: Rather than buying the airplanes, USAF would lease them.
Under this plan, the service would take possession of the first new tanker three years earlier than previously projected and acquire 100 six years earlier.
More importantly, the lease allowed USAF to spread out the cost. Officials argued they could not afford huge up-front outlays of an outright purchase, on top of all other existing budget demands.
Those demands are huge. Through the 1990s, USAF took one budget cut after another and diverted money from investments to pay for everyday expenses. In September 2000, Gen. Michael E. Ryan, USAF Chief of Staff, told Congress, “Our aircraft are aging out at a rate that has us very concerned. … We have never dealt with a force this old.”
Now, the Air Force no longer can defer aircraft recapitalization, but its near-term budget isn’t big enough to buy all the aircraft it needs, so USAF tried to postpone some of the costs by leasing the tankers.
To be sure, it was not the most cost-effective plan. Cost, however, was not the only consideration for Air Force officials. Also important was the need to get new tankers on the ramp without robbing funds from other key programs.
In any event, the lease issue is now largely moot. The Pentagon, pressured by McCain, agreed on Nov. 5 to a compromise in which it would lease only 20 KC-767s and buy the last 80. They would be delivered between 2006 and 2014.
The program entails $18.3 billion in acquisition costs. The budget rules require cash up front for any purchase, so USAF will have to find new billions fairly soon.
Where will the money come from? Congress could increase the Air Force appropriation. What is more likely, however, is that the Pentagon will push USAF to finance much of the deal with cuts in other areas. The service’s top weapons buyer, Marvin R. Sambur, told Reuters in December that every major USAF weapon program would be vulnerable to cuts or delays to pay for the tankers. Press speculation, predictably, has fallen on the F/A-22 Raptor.
There is general agreement that the Air Force’s tanker fleet needs to be modernized. However, the Congress and Pentagon should not forget two critical requirements.
First, tanker replacement must be accomplished relatively soon, given the KC-135’s high maintenance cost and vulnerability to catastrophic problems. Second, the tanker cost cannot be allowed to crowd out critical fighter and other programs. An increased appropriation is in order.
With its lease plan, the Air Force had found a way to thread the budgetary needle. Congressional critics didn’t like the plan, however, and forced USAF to accept a different one. In so doing, they also inherited an obligation to help make it work.