KC-X Winner: The Airbus A330 MRTTMar 02, 2008 21:20 UTC by Defense Industry Daily staff
In January 2007, the big question was whether there would be a competition for the USA’s KC-X aerial tanker RFP, which will cover 175 production aircraft and 4 test platforms. The cost for this first phase alone is likely to reach $35+ billion, but the USAF believes that adding new plane types to America’s 40-50 year old aerial tanker fleet is its #1 priority, lest unpredictable age or fatigue issues like the ones its F-15A-D fleet is experiencing ground its aerial tankers – and with them, a substantial slice of the USA’s total airpower.
Boeing’s KC-767 Advanced Tanker was matched up against Airbus’ larger A330 MRTT/KC-30 for this competition. Each has a consortium, and each had advantages. After all the studies, the lobbying, and the proposal refinements, however, the USAF has picked a winner on Feb 29/08.
The A330 MRTT/ KC-30B from Northrop Grumman and EADS Airbus will now become the USAF’s next aerial tanker – if the USAF can make its decision stick…
“The initial contract for the newly named KC-45 is for the system design and development of four test aircraft for $1.5 billion. This contract also includes five production options targeted for 64 aircraft at $10.6 billion.”
Follow-on procurement of 110 production aircraft will be split into several production lots per usual procedure; the USAF has estimated their value at $35 billion over 25 years, plus additional costs for sustainment and support. The news even came as a bit of a shock to EADS’ CEO. The Financial Times of London reports that:
“As recently as Friday afternoon the EADS team had been convinced that Boeing would take the contract. Mr Gallois, about to leave Paris for a mountain holiday, said he had simply not believed his ears when informed at 10.25pm local time last night.”
Tom Enders, President and CEO of Airbus added that:
“All 4 System Design and Development aircraft are already in production. Preparatory work is now underway for our commitment to co-locate the final assembly of the tankers and A330 civilian freighter aircraft at Mobile, Alabama, creating the first new large commercial aircraft assembly facility in the U.S. in over 40 years.”
Gen. Arthur J. Lichte, commander of US Air Mobility Command, said that the Northrop/EADS KC-30 had been chosen because it offered “more cargo, more fuel offload, more passengers and more availability.” The USAF took pains to stress the degree of rigor in the selection process, and the importance of the contract, in hopes of forestalling a protest. Whether or not a protest is forthcoming from Boeing, however, there will almost certainly be a pitched battle on Capitol Hill. The USAF has worked to prepare for that likelihood with a $240 million Tanker Transfer Fund that could be spent during a protest.
A split-buy is the most likely proposal in the political arena, given both past tendencies in Congress and the political leanings of the states most affected, which tend to lean more toward the Democratic Party in Boeing’s case, and more toward the Republican Party in EADS/Northrop’s case. On the other hand, the USAF strenuously opposes a split buy, both for reasons of delay (estimated at 18-24 months) and of future operations and maintenance inefficiencies.
As they say in the airlines: “We are expecting turbulence ahead. Please fasten your seatbelts.”
USAF | EADS | Northrop Grumman | Financial Times of London | Reuters | Seattle Post-Intelligencer | Seattle Times | Wichita Eagle (round-up of official statements, incl. politicians & unions) | Aviation Week (USAF’s fund) | AP, via Boston.com (Pratt & Whitney loses) | Seattle P-I (Gen. Mosely re: protest prospects) | Seattle P-I (inquiry possible) | Wichita Business Journal (lawmakers will protest).
UPDATE: The June 18/08 GAO ruling sustaining Boeing’s protest and recommending a do-over has no enforcement teeth, but it blows the political debate wide open and throws Airbus’ victory into doubt. See DID’s members-only Insider article “The USAF’s KC-X Aerial Tanker RFP” for full coverage of the RFP, the decision, and subsequent events.