It will be more difficult for the Air Force to choose its next aerial-refueling tanker, thanks in large part to a Congressional ruling on the WTO's investigation of government subsidies to EADS. In short, the House of Representatives made it compulsory for the Pentagon to consider the WTO ruling on illegal subsidies. Originally, the DoD made the decision that any WTO action would be exempt from the competition. At the time, such action favored EADS. The inclusion of such action now favors Boeing and will force EADS to adjust pricing. The WTO ruled in March that Airbus received European subsidies, thus creating an unfair competitive advantage. If the AF and the DoD wanted to make this a level playing field, it had to consider the WTO's future decision. Previous request for proposals excluded the WTO concerns in an effort to show there was a competition. Without it, EADS/Northrop Grumman vowed they would not participate.
The cost associated with developing a brand new airframe is considerable, especially, if the design is not accepted. Airbus was hurting because of the A380 and its delays. According to a Business Week article, Airbus received $4 billion dollars in aid from four European governments to help subsidize the company. On the flip side, Boeing is equally struggling with cost overruns and delays with its B787; however, it is not receiving any assistance from any government for the airplane's development and testing. Thus, comes the question of actual cost ... is this how Airbus could provide the A330 at such a cheaper price tag? Do they even have an option to provide a different airframe?
The Airbus family of jets includes narrow body airliners--A320s, but this aircraft clearly do not meet the RFP requirements. The Boeing B767 is a wide-body airliner and oddly enough is only slightly larger than the KC-135 (which would be considered a narrow body) and would have the least infrastructure impact to the Air Force. Airbus is currently working on the A350 which is in delay. Cost are again mounting, but to date no word on any subsidizing by European governments. The company is still selling A330s and A340s to international airlines. Boeing's order sheet is also extremely full with the commercial demand for its B737 NGs, B777s, and subsequent orders of the B787.
Do not get me wrong, I am very much for the AF to get the best aircraft available. So I ask the question "why then would Boeing provide the AF with a design/concept that is over 20 years old?" Why not set the B787 as the next KC-X? Boeing is making some substantial changes to the aircraft it originally bid. Is it the cost of the B787 versus the conversion of the B767 with significant modifications that make it prohibitive? Perhaps. Boeing states the new B767 tanker, the NewGen Tanker, will use some of the latest technology provided by the R&D of the B787, but it will still be a B767. Perhaps the AF will not need a B787, but it must receive an air frame that can withstand the test of time just as the KC-135 has.
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I agree with the statements in your last paragraph Adrian. However, I would be willing to sacrifice a little on the "latest and greatest" technology and airframes in order to speed up the procurement process.
ReplyDeleteThe decades-long process of aircraft procurement essentially makes even the latest technologies and airframes somewhat obsolete before the first aircraft rolls off the line. Delays in production as a result of "add-ons" to keep up with the rapid pace of technology slows the procurement process and forces companies to up their costs, sometimes leading to more delays. This has happened to not only the new Tanker procurement, but also with both the F-22 and F-35.
I think we can speed the procurement process up in two ways. First, we can ensure aircraft designs are modular and upgradeable after they roll off the line. This will minimize upgrades in the design phase and speed the design to production timeline. Structured scheduled upgrades can be better planned after delivery of the aircraft. Second, we can enforce the financial rules already in place on big-ticket procurements going over budget by a certain percentage. Enforcement of these rules will lead to companies providing more accurate pricing during the competition phase.
I think both of these ideas, if enforced, would lead to faster aircraft procurement processes and real aircraft in the Air Force as opposed to continually upgraded aircraft on paper.
Maj Andrew Wiles, USAF
CGSC Class 10-02, SG 6E
Adrian brings up some great points, and the continuing stuggle between speedy procurment and acquiring technology that suits present and future missions. It also tackles the tough subject of governmental protections and fair trade as it pertains to certain airplane manufacturers. Thanks for the insight, I guess we'll have to see how this pans out over time.
ReplyDeleteNathan Saul
MAJ, SC
US Army
Class 10-02, Mighty 6D