Qb001
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New Group Opposes Boeing Tanker Lease

Thu Jun 26, 2003 11:34 pm

Watchdog Urges Congress to Oppose Corporate Bailout of Boeing.
http://www.defense-aerospace.com/data/communiques/data/2003Jun16507/index.htm
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N79969
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RE: New Group Opposes Boeing Tanker Lease

Thu Jun 26, 2003 11:37 pm

The KC-135s need replacement. That is pretty clear but the airplanes should be purchased outright and not leased. I agree that the lease arrangment is corporate welfare and a ripoff of the taxpayer.
 
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STT757
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RE: New Group Opposes Boeing Tanker Lease

Thu Jun 26, 2003 11:39 pm

The planes will be bought at the end of the lease, they are leasing because they do not have the funding to buy them outright at this time.

They need to replace all 550 ! of the KC-135s, to start buying them outright today would be a huge burden on the Defense budget. Better to lease and spread the payments out, that's how most folks can afford to drive BMWs etc.
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KUGN
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 12:01 am

$3.2b to upgrade KC-135s? I wonder how they got to those numbers. Pricelist from boneyards, perhaps. There we have some real idiots...
 
CX747
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 12:51 am

The KC-135s NEED to be retired. You can't update or refurbish them anymore. The 767 tanker deal is needed and is not a rip off to the American taxpayer. If we had been smarter, we would have bought the replacement aircraft several years ago and henceforth gotten more spending power out of our dollars.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
Tan Flyr
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 2:16 am

The KC-135 replacement program should have been accelerated years ago, But the Clinton Administration killed it.(First proposed during Bush 41)
I remember reading ,in the late 90's, that some of the KC-135's were scheduled to remain until 2040..this was on aircraft delivered in the early 60's..hence an almost 80 y/o air tanker.
Thank God someone came up with at least a starting point solution to this problem. (The Airforce admitted years ago that they should have ordered FAR MORE KC-10 Extenders).

I am sorta surprised that they are using the 762 platform..but hey I'm not an engineer. I have read unsubstantiated assertations that they are going to use some 762's at Mohave and Victorville...Most of the press I read indicated these would all be new units from Everret.

In any case we have a long way to go to replace 500+ KC-135's..and even at this rate, many will be 50+ yrs old by the time they are retired. I guess it gives great testimony to the initial quality of the aircraft, and the ability to maintain it for so many years by guys born long after they were built.
As some might recall, the AF bought a lot of the retired AA and TW 707's in the late 70's/early 80's to use for parts for the 135's. I think the American taxpayer has gotten his/her moneys worth from the KC 135 fleet.

SO if the lease deal gets us started, so be it.
 
elwood64151
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 2:48 am

Fact: The United States Military is being used as a rapid-response police force for the UN to enforce UN mandates and to "maintain peace" in various parts of the world.

Fact: In addition to this, the military must be ready to respond to attacks, both conventional and unconventional, on the United States. The most rapid reaction force we have is the Air Force and Naval Aviation. In order for those two arms of the US Military to be effective, they must have fuel. That fuel will be delivered in great measures by tankers like the KC-10 and KC-135.

Fact: Both the KC-10 and KC-135 fleets are rapidly aging and expensive to maintain and operate.

Fact: The US military's role in the future of the world seems like it will only expand.

With those facts in mind, it makes sense to add more aircraft to the tanker fleet, especially if they are newer and less-costly to operate and maintain. And if they are leased, then we have the option of purchasing them (if they work out) or buying something better later (if they don't).
Those who fail to learn history are doomed to repeat it in summer school.
 
N79969
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 2:50 am

The KC-10 are kind of new actually. The KC-135 have about had it. I think the B-52s actually will be in service until 2040.
 
IslandHopper
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 3:51 am

I doubt the US gov't will buy old 767s. They're smart for ordering new frame 767-200s. The frames will last for another 40 years like the KC-135, and they'll have a TON of spare parts from old 767s.
 
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PW100
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 5:06 am

Boeing sells fully furnished civil 767s at like $100 million a copy.
$21 Billion for 10 year lease on 100 tankers, thats $210 million per airframe for 10 year lease. I can understand that Boeing really like this deal. It will also bridge the period from 767 to 7E7, since I don't see many airlines ordering the 767 now its successor has all been but announced.

PW100
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0A340
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 5:32 am

Questions:

- Who came up with the $21 Billion for 10 year lease on 100 tankers figure?
- What are the other (realistic) alternatives? Would the C-17 do the job?
- How about the 757/777 etc?
- Was there ever an open RFP from competing aiframes (namely, the A332?)

just asking...
 
KUGN
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 5:35 am

I am not sure if all of $21 billion goes to Boeing. A lot of investment is going into reconstruction of AFBs that are going to gradually receive 767 tankers.
 
transswede
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 5:43 am

OA340,

Airbus did indeed express interest in bidding for the tanker contract (using the A330-200 and more U.S. based assembly), but I don't think it was ever evaluated, since there was no bidding. The contract was always intended for Boeing.
 
KUGN
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 5:57 am

This press release might be helpful

http://www.af.mil/stories/story.asp?storyID=123005100
 
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STT757
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 6:04 am

All the new KC-767s will be "new builds".

"Boeing sells fully furnished civil 767s at like $100 million a copy.
$21 Billion for 10 year lease on 100 tankers, thats $210 million per airframe for 10 year lease."

The price also reflects not just the aircraft but the retrofitting, boom, enternal tanks, upgraded cockpits, upgrade/secure communications etc.

It's a little more complicated than an average 767-200.
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STT757
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 6:05 am

ps..

The new KC-767 may also be wired to withstand a EMP from a Nuclear blast, that alone would cost a few bucks.
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PW100
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 6:29 am

STT757
Sorry if my post came over too negative. I fully understand that it is a little more complicated than your average 767. Converting aircraft can be quite expensive. Boeing still hasn't launched their 744 cargo conversion since at $20 million it is still too expensive, and that's just a cargo conversion. However it does seem to me that conversion/new build on production line is more convenaint [and cheaper] than "in-field" conversions. Retrofitting of boom/externals tanks shouldn't be too much of a problem since this can be accounted for from day one of new-production, rather than reversed engineered into a finished airframe.
I would expect the majority of the extra expenditure to be used for engineering and production development. However spread out over at least 100 airframes, this should not be a huge amount.

I was wondering if that $21 billion also includes costs like spares, running cost, cost of modifying/adapting of maitenance bases, training [cockpit crew, maintenance, engineering etc], or does that money only cover for the dry lease?

Good points though on the EMP, secure comms/IFF, not to mention defensive aids.

PW100
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AvObserver
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 7:07 am

TransSwede
"Airbus did indeed express interest in bidding for the tanker contract (using the A330-200 and more U.S. based assembly), but I don't think it was ever evaluated, since there was no bidding. The contract was always intended for Boeing."

There was a DOD/USAF statement saying that the A330 was rejected in the initial evaluation for the first contract because of its' significantly larger footprint (too large an airplane), perhaps due to airfield space considerations but that it would be considered for a future tanker contract. Who knows if this was the truth but the A330 IS substantially larger than the KC-135s due to be replaced, the 767-200 much less so. I've no problem if Boeing is given preferred status due to nationalistic considerations but EADS should be allowed to bid against Boeing in all such proposals, if only to secure a better deal from the U.S. manufacturer. And Eurofans, before you squawk, would you think that any E.U. member nation would now buy a tanker from Boeing with EADS offering the A330-based model? I didn't think so.  Big grin
 
Trvlr
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 7:10 am

"...or upgrading the 127 existing KC-135E tankers"

Haha! Good one. Maybe while they're at it they can refurbish some Revolutionary War muskets to give to the police forces in Iraq.

Aaron G.
 
dynkrisolo
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 7:17 am

People need to have a better understanding of deal before judging.

I will summarize from http://seattletimes.nwsource.com/html/boeingaerospace/134806300_tankers24.html

Per plane cost: $131 million
Leasing cost per plane for 6 years: $138 million
buy-out option at the end of the lease: $40 million per plane

The $20 billion figure is not an upfront cost, but it is spread over the entire contract period. When you get a straight average and compare with the current cost of a 767, then of course it looks outrageous. If you have taken out a car loan or a mortagage, you should know your total payment would be a lot more than your purchase price.

I took out my financial calculator, and punched some numbers. The deal is roughly equivalent to a loan with 9% APR. The interest rate sounds a little bit high, but not outrageous.

In the article, it also says Boeing has promised not to make more than 15% profit from the airframe and from the military modification. It also has a "most-favored-customer" clause that will force Boeing to refund Pentagon the difference if they sell the plane to another customer at a lower price. I didn't know Boeing has become Circuit City.  Big grin
 
Confuscius
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 7:32 am

would you think that any E.U. member nation would now buy a tanker from Boeing with EADS offering the A330-based model?


Boeing, Italian MoD and Alenia Reach Agreement on 767 Tanker Transport Cooperation

FARNBOROUGH, United Kingdom, July 26, 2002 – The Italian Ministry of Defense, Boeing [NYSE:BA] and Alenia Aeronautica, together with its subsidiary Aeronavali, announced today that the parties have reached agreement in principle to develop, produce and support four 767 Tanker Transport aircraft for the Italian Air Force.

more...
http://www.boeing.com/news/releases/2002/q3/nr_020726n.html
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aerobalance
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 7:41 am

STT757, where do you get your information on the airframe as 'new builds'? I just so happen to work on the GTTS project and sources here at my office state that the airframes will be refurbished.

Cheers
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AvObserver
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 8:12 am

OK, Confuscius, I stand corrected. Italy IS an E.U. member. I have to say I'm surprised at this and wondering if the Italian Ministry of Defense is taking political flak for making this decision. I'd think E.U. member nations would at least be strongly encouraged to support the European solution, even though they're free to make their own choices. Nevertheless, it doesn't change my preference for the American military to be equipped with U.S. company built aircraft. But thanks for sharing that.
 
sv7887
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RE: New Group Opposes Boeing Tanker Lease

Fri Jun 27, 2003 1:03 pm

Hi All,
It has been established clearly that the KC-135 fleet is in dire needs of replacement. As for corporate welfare...Do you really think it's politically feasible to select a Foreign built A330? Never mind the flak from the labor Unions and the protests of the Corporations. It's pretty much an unwritten rule that all US Military personnel use US Aircraft, and travel on US Airlines.

Corporate Welfare? Not really. The prior postings have shown that the DOD might be paying a slight premium. But the political argument for doing so can be made. Economists would argue against doing this, but if US jobs can be created why not do it? It's not like other countries don't subsidize their Military contractors..Other than the Airbus scenario, even Russian gives low interest loans to their contractors. In paying a premium for the KC-767 the DOD isn't doing something unheard of. As far as critics go, what's next? Replacing the VC-25 with a A340 or using the A330 for the next generation AWACS? Please, this is just knitpicking. I think the press ought to leave it alone.

Cheers,
SV
 
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RayChuang
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RE: New Group Opposes Boeing Tanker Lease

Sat Jun 28, 2003 2:51 am

I think the USAF needs the 100 767-200-based tankers NOW because the KC-135 airframes are getting old and are getting quite expensive to maintain even with regular D-check overhauls.

I believe that the 100 tankers will be delivered, and when the Boeing 7E7 project becomes a real airplane the USAF will become a launch customer, buying possibly 300+ airframes from 2008 on; this will allow the USAF to phase out most of its aging KC-135 fleet except the planes built between 1962 to 1965.
 
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STT757
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RE: New Group Opposes Boeing Tanker Lease

Sat Jun 28, 2003 4:53 am

"STT757, where do you get your information on the airframe as 'new builds'? I just so happen to work on the GTTS project and sources here at my office state that the airframes will be refurbished."

Why would the AF want second hand 767s with thousands of hours in commerical service thus limiting it's service life, they are all going to be new builds.

<http://story.news.yahoo.com/news?tmpl=story&u=/ap/20030624/ap_on_go_co/refueling_tankers_1

"The lease agreement is crucial to Boeing and thousands of workers in Washington state, where the airframes are to be built, and in Kansas, where military modifications are to be done."

You might be confused with the British MOD who are going to convert former BA 767s into Tankers.

The Japanese Self Defense Force and the Italian Air Force are right now getting new build 767 AWACS and tankers, the 767s for the Air Force will be new builds.

Airbus was pitching new build A330s, to be modified by Lockheed.

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STT757
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RE: New Group Opposes Boeing Tanker Lease

Sat Jun 28, 2003 4:55 am

"I believe that the 100 tankers will be delivered, and when the Boeing 7E7 project becomes a real airplane the USAF will become a launch customer, buying possibly 300+ airframes from 2008 on"

The 7E7 is too much airplane for a KC-135 replacement, the KC-135 (707) is not that big. The 767-200 is just a little bigger but not by much, the 7E7 would be much bigger and way more expensive than just buying more 767-200s.
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GDB
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RE: New Group Opposes Boeing Tanker Lease

Sat Jun 28, 2003 5:12 am

Although the UK might convert ex-BA 767s, new build A330s are also in the running, I suspect the RAF would prefer new builds if the price is right, plus the A330s greater cargo capacity might be a factor too, but the 767 seems an attractive deal.

It is fair to say that the KC-135Es need replacing and soon, though the bulk on the -135 fleet are KC-135Rs with CFM-56 engines, and more recently, an extensive avionic upgrade.
However, this stinks of corporate welfare, if the 135E replacement is so urgent, and it is, they could have already started with converting used 767s leading to an incremental programme of new 767s, ordered in the usual USAF style in batches every year.
Maybe 20-30 conversions, the balance of the 100 being new.

Then look hard at various proposals for new tanker/transport designs, (LM have produced some, I'm thinking of those here). This is for the KC-135R and KC-10 replacement, also a supplement for the USAFs transport fleet.
From 2015 onwards.

Everyone is happy, the USAF gets a new tanker programme on stream, the work is more evenly spread both financially and in jobs (helping to ease it through Capitol Hill), then LM get back into the big airframe business with a new advanced design, with potential commercial applications.
 
GDB
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RE: New Group Opposes Boeing Tanker Lease

Sat Jun 28, 2003 5:31 am

An illustration of a LM concept that I mentioned above;
http://www.lmaeronautics.com/products/ada/adv_mobility/tanker.html
 
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RayChuang
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RE: New Group Opposes Boeing Tanker Lease

Sat Jun 28, 2003 8:35 am

I don't think the USAF will want ex-airline 767-200's to be converted to tankers. Between the cost of what amounts to a freighter conversion, zero-timing the airframe life, installing the air-refuelling equipment and rebuilding the cockpit to conform to military standards (including secure communications systems), it could end up being just as costly as buying a new airframe from scratch!

I should remind people that the Boeing 7E7 should end up probably not much different than the KC-10A's that the USAF bought during the late 1970's and early 1980's. This means more cargo carrying capacity and also more fuel can be carried to refuel other aircraft; the USAF is discovering that the KC-135E/R's internal fuel storage is often big enough to do large-scale refuelling during combat operations. The USAF tanker and possible ELINT/SIGINT intelligence variant of the 7E7 will likely be the short-fuselage version, while the long-fuselage 7E7 could become the basis of the combined AWACS/JSTARS command post.
 
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RayChuang
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RE: New Group Opposes Boeing Tanker Lease

Sat Jun 28, 2003 8:51 am

Actually, I should have said "not big enough" in regards to the KC-135 internal fuel storage. Embarrassment

Even if the 127 KC-135E's were all converted to KC-135R standards, we're still dealing with an old airframe with inadequate fuel capacity for large-scale refuelling. I'd rather have the USAF get 100 767-200-based tankers as soon as possible and then further down the road buy tankers based on the short-fuselage version of the 7E7 to begin the complete phaseout of the KC-135 fleet before 2020.
 
united777fan
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RE: New Group Opposes Boeing Tanker Lease

Sat Jun 28, 2003 9:39 am

I think its kind of interesting that this "watchdog" opposed to the 764 tanker is based in France. I don't mean to sound like a conspiracy theorist but I think the main reason this group is not that friendly to Boeing.
 
GDB
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RE: New Group Opposes Boeing Tanker Lease

Sat Jun 28, 2003 11:48 pm

The group in this article sound like a US group to me, (and it is a 762, not 764 lease), still I don't have the apparent levels of paranoia so prevalent in parts of the US right now, (sure that is not a US site that has some European, and others including Israeli, companies running ads on that site?
I've heard plenty of negative comment from the US about this deal anyway.
 
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STT757
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RE: New Group Opposes Boeing Tanker Lease

Sun Jun 29, 2003 4:59 am

The tankers will be 767-200s, Boeing is developing a replacement for the JStars, TACAMO, AWACS aircraft based on the 767-400.

I believe that aircraft is called the EA-10?
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syncmaster
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RE: New Group Opposes Boeing Tanker Lease

Sun Jun 29, 2003 1:25 pm

Also about the Airbus A330. I really don't see the U.S. Government purchasing/leasing 100 A330's from a European company, especially considering our 'hometown' aircraft company is starting to hurt.
 
Spacepope
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RE: New Group Opposes Boeing Tanker Lease

Sun Jun 29, 2003 1:46 pm

The E-10 is going to be based off of the 764. I believe the first order for an airframe was approved about 2 months ago. I hear it is going to have quite a large crew. The project is currently known by an acronym. MC2A or something like it. Heard that the orders for the next decade or so may total up to 11 planes.

T.J.
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