Air Force strives to cope with delayed tanker lease.

U.S. Air Force officials are struggling to figure out how to proceed in the aftermath of Defense Secretary Donald Rumsfeld's decision to postpone a controversial plan to lease 100 Boeing KC-767A tanker transport aircraft as replacements for its aging KC-135 Stratotankers.

The Air Force had planned to begin leasing the KC-767As in 2006. Rumsfeld, however, announced in May that he would defer a decision on the plan until additional reports--an analysis of alternatives and a mobility capability study--are completed. He directed that those studies be completed by November.

Also, the Air Force's Fleet Viability Board is assessing the condition of the KC-135s, according to officials at the Air Mobility Command, which is part of the U.S. Transportation Command, headquartered at Scott Air Force Base, Ill. The board will report its findings to senior leadership within the next few months, officials said.

The service is eager to begin replacing the KC-135s, which have an average age of more than 44.3 years, making them the oldest combat weapon system in the Air Force inventory, Col. Marshall Sabol, AMC's deputy director for plans and programs, told National Defense. "Most people think the B-52 is our oldest aircraft. But it's the KC-135," he said.

"We're talking about an airplane that was built between 1959 and 1964," added Brig. Gen. Paul J. Selva, commander of the AMC's Tanker Airlift Control Center. During that period, Boeing built 732 KC-135s, which are a version of the Boeing 707 passenger plane. About 550 remain in service.

The KC-135s were built at rates of 75 to 100 per year, Sabol said. Aircraft construction has become so expensive that "we can't do that today," he said. "If we built 15 a year, that would be an aggressive program, really."

At that rate, Selva said, it would take 30 to 40 years to recapitalize the fleet. The oldest KC-135s then would be 80 to 90 years old. "Asking a pilot to fly an aircraft that old would be like going to war today with an airplane built by the Wright Brothers."

To jumpstart the recapitalization process, the Air Force in July 2003 sent Congress a proposal to lease--not buy--100 KC-767As from the Boeing Co., headquartered in Chicago, Ill. The contracted lease price per aircraft was $138 million in 2002 dollars, or a total of $16.6 billion, according to Marvin R. Sambur, assistant secretary of the Air Force for Acquisition.

Under the lease, he told Pentagon reporters, the new tankers would be delivered five years sooner than under a traditional procurement plan. The contract includes a provision for the Air Force to purchase the fleet for another $4.4 billion at the end of the lease--if Congress approves.

The KC-767A is a version of the Boeing 767 airliner. It can carry just over 200,000 pounds of fuel--20 percent more than the 135--and it can be refueled in flight, a capability the KC-135 doesn't have. I The KC-767A also can refuel Navy, Marine Corps and allied aircraft, making it easier to conduct joint and combined operations, Sambur said. At maximum takeoff weight, the KC-767A requires 4,000 feet less runway than the KC-135E, he said.

The leasing plan, however, was quickly attacked as a waste of taxpayers' money. "Leasing the aircraft will cost American taxpayers billions more than buying them outright," charged Sen. John McCain, chairman of the Senate Commerce, Science and Transportation Committee. Besides, he said, "the military had not previously indicated an urgent need for new tankers."

Investigators from the Justice Department, Federal Bureau of Investigation, Securities and Exchange Commission, Defense Department and General Accounting Office began looking into dealings between Boeing and Air Force officials involved in the plan.

In November, Boeing fired two executives--Executive Vice President Mike Sears and Darleen Druyun, vice president and deputy general manager of Missile Defense Systems--for unethical conduct. In her previous job, Druyun was principal deputy assistant secretary of the Air Force for acquisition and management.

Boeing said the two had violated company policies by communicating directly and indirectly about a job for Druyun "when she had not disqualified herself from acting in her official government capacity on matters involving Boeing."

In her position with the Air Force, Druyun in 2002 oversaw negotiations with Boeing to lease the KC-767As. In April 2004, she pled guilty in federal court to one count of criminal conspiracy.

Boeing has taken steps to limit the damage to its reputation. It retained former Sen. Warren Rudman to review the company's ethics programs. Boeing Chairman and CEO Phil Condit resigned "for the good of the company," said the new chairman, Lewis E. Platt.

In February, Boeing's new president and CEO, Harry Stonecipher, announced a slowdown in the 767 tanker program schedule to accommodate the secretary of defense's reviews. The slowdown would be implemented "in a manner that will keep key program elements intact in the months ahead," Stonecipher said in a statement.

Through the end of 2003, Boeing had spent $270 million of company money on the Air Force 767 tanker program and had been spending approximately $1 million per day since then, he said.

The delay won't have any immediate impact on the existing fleet tanker fleet, Selva said. "The fleet's in as good a shape as it's ever been," he said. "The problem is the age of the airplane. The real story is the number of hours needed to maintain it."

Currently, maintenance crews spend an average of 8.3 hours working on the KC-135s for every hour of flying time, Selva said.

Over the years, the KC-135s have received a number of upgrades. Perhaps the most significant was the Pacer CRAG (compass, radar and global positioning system) program, said Sabol.

Between 1996 and 2002, more than 560 KC-135s were sent to Air Force depots for a $700 million avionics upgrade. In addition to the new compass, radar and GPS, the improvements included a traffic alert and collision avoidance system with new digital, multi-function cockpit displays.

One major result of the Pacer CRAG modifications was elimination of the requirement for a navigator, reducing the crew to three--pilot co-pilot and boom operator. The change was expected to save the Air Force $31 million a year.

In April 2004, Rockwell Collins, of Cedar Rapids, Iowa, began the first phase of full-rate production under the KC-135 Global Air Traffic Management program. As part of the GATM program, Rockwell Collins in 1999 won a contract potentially worth in excess $700 million to upgrade the communications and navigation systems of more than 544 KC-135s to make it easier for them to operate in crowded civil airspace.

In addition, more than 467 of the original KC-135As have received new CFM-56 engines, produced by CFM-International. The re-engined tanker, designated either the KC-135R or KC-135T, can offload 50 percent more fuel, costs 25 percent less to operate and is 95 percent quieter than the KC-135A, Air Force officials said.

Under another modification, the Air Force Reserve and Air National Guard in 1981 began "re-engining" 161 of their tankers, installing TF-33-PW-102 engines, from Pratt and Whitney. The re-engined tanker, designated the KC-135E, is 145 percent more fuel efficient than its predecessor and can offload 20 percent more fuel.

Such improvements have enabled the KC-135s to play a key role in Afghanistan and Iraq, said Col. Russell DeLuca, chief of AMC's Operations Management Division. "Since the start of Iraq, we have completed more than 2,000 missions in support of strategic airlift and inter-theater deployments," he said. In addition, tankers under the operational control of Central Command flew more than 9,000 sorties in-theater, offloading more than 475 million pounds of fuel.

Raids by the Air Force's 21 B-2 Spirit long-range bombers, flying from their headquarters at Whiteman Air Force Base, in Missouri, to targets in Afghanistan and Iraq, would have been impossible without the KC-135s, said Selva. "Those flights lasted 40 to 45 hours," he said.

"During Operation Iraqi Freedom, AMC refueled 26 B-2 strike sorties," Selva said. The refueling was conducted by tankers from four locations along the B-2 route--Air National Guard bases at Pease, N.H., and Bangor, Maine, and U.S. Air Force bases at Lajes, in the Portuguese Azores Islands, and Moron, Spain.

AMC tankers also have played a major role in homeland defense. Since the September 2001 terrorist attacks, they have flown 1,704 missions within the United States, refueling 3,684 aircraft flying combat air patrols over major cities and public events, Air Force Gen. John W. Handy, head of the U.S. Transportation Command, told a House Armed Services Committee hearing.

The KC-135's primary method of transferring fuel is to pump it through a flying boom, controlled by an operator stationed in the rear of the plane. This is the method used by most Air Force aircraft.

In addition, a special shuttlecock-shaped drogue, attached to and trailing behind the flying boom, may be used to refuel aircraft fitted with probes. This enables the KC-135 also to refuel Navy, Marine Corps and allied aircraft, DeLuca said.

Despite the age of the aircraft, the performance of the KC-135s in Afghanistan and Iraq was "impressive," Selva said. "The mission performance rates were in the high 90 percents," he said.

Nevertheless, the Air Force intends to begin retiring its oldest tankers, no matter what Rumsfeld decides about the leasing proposal.

Originally, Sabol said, the Air Force planned to retire 61 KC-135Es over the next three years--37 in 2004, 16 in 2005 and eight in 2006. Congress, however, stepped in and said the service could retire no more than 12 in 2004.

"We still plan to retire 61 over that three-year period," Sabol said. The additional 25 that were supposed to retire in 2004 will now go in 2005 and 2006, he said.

Even with these retirements, Air Force officials said they have enough tankers to handle any foreseeable contingency. Even if another major conflict erupted--say, in Korea--the service could meet its refueling requirements by activating more Air National Guard and Air Force Reserve units, DeLuca said. About half of the tanker fleet is in guard and reserve units, he said.

Also, officials said, as the KC-135s retire, the Air Force will rely more on its smaller fleet of KC-10 Extenders. The service has 59 KC-10s, which are modified Boeing DC-10s.

KC-10s, which entered serviced in 1981, are only half as old as the 135s, and they carry more than 356,000 pounds of fuel--almost twice as much as the 135s. They can use a boom or a hose and drogue system to refuel a wide variety of U.S. and allied military aircraft.

Once the Pentagon studies are complete, many in the aircraft industry would like to see Rumsfeld open the tanker replacement program to competition. If he does, one likely candidate is a tanker version of the Airbus A330-200 airliner.

Airbus--a European consortium--is negotiating with the United Kingdom to provide the A330-200 as the new tanker for the Royal Air Force. Boeing also is competing for that contract. The A330-200 carries 111 tons of fuel without the need for auxiliary fuel tanks, enabling, it to refuel more aircraft than existing and competing tankers, according to Noel Forgeard, Airbus president and CEO.

Support for the Boeing KC-767A lease plan, meanwhile, remains strong in the U.S. House of Representatives, which in June passed a 2005 Defense appropriations bill containing $100 million to launch the leasing program. "The language of this bill actually requires--rather than simply allows--the Air Force to negotiate and sign a new deal for 767 tankers," said U.S. Rep. Norm Dicks, D-Wash., a strong advocate for the 767 program.

The House bill was referred to a joint conference committee to work out differences between it and a Senate measure, which does not contain a provision favoring the lease plan.