Quoting Lumberton (Reply 38): Sorry, but if you note my previous post on the agricultural subsidies, I bet most of the world would agree that the EU is flat out wrong.

Sorry, but not only the EU, but also the USA massively subsidizes farming. But you are right, most of the world thinks that's wrong, me included.

But let's stop here, this really belongs to non-AV...

IMO Airbus can save a lot of hassle by working away now.

Let Boeing have the order, that they will get anyway.

The fact is that this is the way that competition in the US works, (pork barrel) and that only US providers need apply.

In this case, that means Boeing.

So why do'nt we stop this sham now, and ask Mr Boeing what aircraft are the USAF getting and then give them a blank cheque.

Quoting Oryx (Reply 43): Actually we were (are still?) paying for (a part of) the rendered services.

A key word is part. The total amount of defense spending attributable to the defense of Europe by the US is in the trillions of current dollars. The US still spends 1% of GDP on NATO, which was for all practical purposes an organization dedicated to the defense of Europe and the supply routes from North America to Europe.

Quoting Revelation (Reply 49): Yes, I know in decades past the EU pumped billions of dollars into the F-16, F-4, F-104, etc but I think those days are past.

They also got technology transfer out of it.

Quote: EU will go with Eurofighter et al unless it's just too darn expensive to do otherwise. I think the UK will be the only EU country to buy F-35, and there's even some doubt around that these days.

Italy will probably. Defense industry relations with Italy are strong.

Quoting Atmx2000 (Reply 52): Quote: EU will go with Eurofighter et al unless it's just too darn expensive to do otherwise. I think the UK will be the only EU country to buy F-35, and there's even some doubt around that these days. Italy will probably. Defense industry relations with Italy are strong.

What about Denmark, Netherlands, Belgium, Norway, Turkey and who knows more, just like in the past.

Quoting Dougloid (Reply 48): Quoting Keesje (Reply 45): I still think still the fundamental problem in the US Tanker competition is: the best aircraft to meet the specs comes from the wrong side of the ocean Tell me more about that.

In the original competition KC30 met the specs much better then the kc767. Boeing & Pentagon "solved" the issue then, but info leaked, people got jailed. Since then every has been trying to forget hard.
http://zfacts.com/metaPage/lib/KR-04...oeing%20specifications%20rewrite'

One of the disadvantages sited by Boeing was that the KC30 was too big, infrastructure, footprints etc.

Now the USAF seems to have decided they want a more capable more versatile platform & Boeing had no other option then to come up with a KC777.
http://aimpoints.hq.af.mil/display.cfm?id=8110

[Edited 2006-05-01 21:42:02]

This could portend some positive steps towards resolution of this issue before it becomes a full blown international crisis and threatens to derail the WTO.

Boeing, Airbus closer to solving subsidy dispute-German official

Quote: BERLIN (MarketWatch) -- U.S. aircraft-maker Boeing Co. (BA) and European Aeronautic Defence & Space Co.'s (5730.FR) unit Airbus (ABI.YY) are getting closer to solve their row over civil aircraft subsidy, a German government official said Tuesday. "The signals that I get from the companies...are that they could possible head for a bilateral solution or at least that the companies get somewhat closer," a government official said on the condition of anonymity at a briefing on German Chancellor Angela Merkel's visit to the U.S. May 3-5. He added that the Boeing-Airbus issue "could be one issue" during talks between Merkel and U.S. President George W. Bush because "it's up in the air at the moment."

Is the timing a coincidence, or is it happening because of the linkage with the USAF tanker RFI?

Quoting A342 (Reply 37): Quoting KC135TopBoom (Reply 35): BTW, the 60 million Americans who reelected GW, do not agree with you. This may be true, but I think I can safely say that most of the world´s population does agree with me.

Well, how fortunate for the US, then, that they were not allowed to vote in the 2004 Presidential election. But, if we do that, then can I vote in all EU elections, too?

Quoting Keesje (Reply 45): I still think still the fundamental problem in the US Tanker competition is: the best aircraft to meet the specs comes from the wrong side of the ocean

How do you know that? The KC-767 is already flying, and from all reports, meeting every requirement. The first KC-30 is still a paper drawing, even for the RAF and RAAF tankers. None of us will know if the KC-30 will meet specs. or not, until the first airplane enters flight testing.

Let's not jump to assumptions. Remember the MD-11 past all of it's testing, but was a failure in airline service, so they became box carriers.

Quoting KC135TopBoom (Reply 55): Well, how fortunate for the US, then, that they were not allowed to vote in the 2004 Presidential election. But, if we do that, then can I vote in all EU elections, too?

I didn't suggest that they should be allowed to elect the US president, it's not their issue. I just said that since the Iraq occupation, Guantanamo and Abu Ghraib, Bush is very unpoppular in big parts of the world.

Quoting KC135TopBoom (Reply 55): The KC-767 is already flying, and from all reports, meeting every requirement.

Hardly anything leaks, but I have the feeling the KC767 tankers has gone through serious redesign / modifications, after delivery to the Italian Airforce. It is not mature.

It lacks payload/range & cabin. A KC330 e.g. can do 300 people & a full belly from LAX to Bagdad without any reconfiguration and a single stop. After denying this capability for years it can no longer be dismissed / ignored. This time everybody is watching.

Quoting Keesje (Reply 57): Hardly anything leaks, but I have the feeling the KC767 tankers has gone through serious redesign / modifications, after delivery to the Italian Airforce. It is not mature.

"hardly anything leaks", "have a feeling" .... Have there been any reports from the Italian AF? BTW, I have no disagreement with you that the KC-30 would be a superb choice. Politics are going to have their day here, though. Unless--and we've discussed this ad nauseum on many, many other threads--there is a 'quid pro quo' on other issues, like subsidies. However, even if the KC-30 is superior and the 100% solution, the USAF could go with a mix of other aircraft.

[Edited 2006-05-06 00:04:42]

Quoting Lumberton (Reply 58): Have there been any reports from the Italian AF?

There haven´t, neither from Boeing. However that doesn´t say much IMO.

Rumors are there have been delays & redesigns, 1st aircraft back in the US for further tetst mods of the Smiths pods, Air flow problems discovered during the test phase reducing the plane’s top speed, mods for that etc..

They were ordered 5 years ago & are still not operational.

Problems are / will be solved. However few people are suggesting the kc-767 at this moment is a mature of the shelve option.

http://www.airforcetimes.com/story.php?f=1-292925-1310576.php

Quoting Keesje (Reply 59): Rumors are there have been delays & redesigns, 1st aircraft back in the US for further tetst mods of the Smiths pods, Air flow problems discovered during the test phase reducing the plane’s top speed, mods for that etc.. They were ordered 5 years ago & are still not operational.

Rumors? The air flow problem with the Smith A/R Pods has been resolved, and full speed range has returned. BTW, the #1 airplane is in Italy right now, undergoing design verification. It is the #2 airplane that is in Wichita for mod work to the tanker configeruation. All of these KC-767s are built on the B-767 line as B-767-200ERs, then modified at Wichita to KC-767As, then flown to Italy for completion work.

Do you know if the first A-330TT, or KC-30A, will come out perfect, not requiring design modifications? I don't. It will be interesting to see if the under wing refueling pods cause any aerodynamic flow problems for the RAF birds.

BTW, the schedule delivery for the #1 KC-767A to the Italian Air Force in March 2007, may be that has something to do with them not being operational yet?

I agree, and have never said the KC-767 is mature, it is clearly not, neither is the KC-30, or any other proposed KC-135 replacement.

Quoting KC135TopBoom (Reply 60): Do you know if the first A-330TT, or KC-30A, will come out perfect, not requiring design modifications? I don't. It will be interesting to see if the under wing refueling pods cause any aerodynamic flow problems for the RAF birds.

Even though EADS has little experience with boom refueling compared to Boeing we all know that it will be smooth sailing for the A330 Tanker.  

How much better is the A330 than the B767 as a tanker aircraft? 5, 10, 15 20% better, what would the US loose if they chose the B767 over the A330?
If there is no significant difference, why would the US buy the A330? If they want to keep jobs in the US then just buy the B767, why have the A330 made in the US to preserve jobs if it is not that much better of an aircraft? As for the political question, the US has already made a hugh concession to the EU.
The US has it's own helicopter industry, but in a few years, the president of the US will be flying on a EU Marine one, whether its made in the US it is still a EU copter, I use EU because its what this discussion is really about, US versus EU.
In terms of national pride, how huge is that? As for other countries heads of state using US aircraft, those that have their own aircraft and helicopter industry are switching to a local product as soon as its avalaible.. It seems o be a major failing of the US, Boeing is just another company, but to Europeans, Airbus is a source of national pride.

Quoting Par13del (Reply 62): How much better is the A330 than the B767 as a tanker aircraft? 5, 10, 15 20% better, what would the US loose if they chose the B767 over the A330?

Exactly the point I tried to make earlier...do you need the 100% solution all the time? I wish this order would be decided on technical merit, but like most military procurement decisions, in most countries--including those of NATO--it will be highly political. Just a fact of life.

Quoting LMP737 (Reply 61): Even though EADS has little experience with boom refueling

Make that NO experience......

Quoting LMP737 (Reply 61): compared to Boeing we all know that it will be smooth sailing for the A330 Tanker.

Until it gets into the turbulant hot air over Washington DC. The politicians there have the most important responsibility to keep getting themselves re-elected.

The replacement for the KC-135E will be either an upgrade to the KC-135R, or a new Boeing built airplane.

Quoting KC135TopBoom (Reply 64): Make that NO experience......

That's wrong:


View Large View Medium

Photo © Pablo Diaz Moreda

Quoting A342 (Reply 65): That's wrong:

The photo shows the A310 testbed aircraft. Are any of the KC-30s that were ordered by the UK or Australia in service?

Quoting Lumberton (Reply 66): Are any of the KC-30s that were ordered by the UK or Australia in service?

Not yet, but KC135TopBoom said they have no experience with booms which is not true since they have this aircraft.

IIRC the same boom will be used on the A330s.

Quoting DL021 (Reply 5): And precisely which airplanes made by Boeing are the European EADS nations trying to purchase, or considering purchasing?

Not Boeing but Northrop (I believe): The Global Hawk. That thing will be introduced to some armed forces such as Bundeswehr.
And we still buy missiles in the US.

Quoting Wingman (Reply 12): none of these three countries has ever procured such a massive military system (as a % of total annual defense expenditure) from the US.

Woah, bettter come out of the nettles. It is true that, with the defense industry now being less fragmented and hence more competitive, Europe will buy European just like the US has almost always bought American. But until very recently, this simply wasn't the case.

Quoting Poitin (Reply 34): The American military is wary of exporting technology which might be sold on to obviously potential enemies.

"The American military" maybe, but certainly not the American defense industry.

Edit: Sorry I forgot:

Quoting Poitin (Reply 26): The Congress is still very angry over the reaction Bush got from both France and Germany with regard to Iraq II. 2,500 dead American boys and girls doesn't help either. It is pay back time.

Apart from the fact that neither France nor Germany is to blame for the 2,500 dead in Iraq, you are only guessing, right?

[Edited 2006-05-08 08:55:20]

Quoting A342 (Reply 65): Quoting KC135TopBoom (Reply 64): Make that NO experience...... That's wrong:

Quoting A342 (Reply 67): Not yet, but KC135TopBoom said they have no experience with booms which is not true since they have this aircraft. IIRC the same boom will be used on the A330s.

Hello, the test Airbus air refueling boom on the testbed A-310-304 has not left the "chocks" yet, meaning it has not been lowered and flown, in trail of the A-310. Airbus is still doing tests on the possible aerodynamic interference of the boom to the A-310's APU.

It is amazing how similar the Airbus Boom System looks to the Boeing Boom System, right down to the PDI (Pilot Director) Light System.

That amounts to "NO EXPERIENCE".

I assume they have hired a retired French Air Force Boom Operator to fly it during flight testing? But that is not the same as hiring a USAF Boom Operator, since the French AF really only trail it behind their C-135FRs, with the BDA attached (that is not a slap against the French AF, that is simply the way they air refuel). The USAF Boom Operators are required to fly it, since they refuel in all areas of the AR envelope.

So, it is true, Airbus still has no boom experience. Just because they have a designed boom stuck on an airplane, doesn't equate to experience. But, yes, this is essentially the same boom Airbus is proposing for their MRTT programs.

But that KC-310 is a good looking airplane.

Whether or not the KC-30, A-330TT, or A-330MRTT is a successful tanker remains to be scene. Neither I, nor anyone here can say that it will be, or it won't be, and none of us can say it is better, or worse than the KC-767 (in the missions USAF wants), or any other airplane Boeing will use to compete against it. It is strange that the two current Air Forces that have ordered the A-330 tankers have ordered it in two different configuerations (RAF the A-330TT, essentially an A-330-200 with under wing A/R pods, and the RAAF with the A-330MRTT, with the A-340 wing for heavier A/R pods).

What we can say is Boeing has 60 years experience with tanker type airplanes and air refueling booms, dating back to the KB-29 in 1946. Since the conversions of those KB-29s, Boeing has converted or built the KB-29, KB-50, KC-97, KC/EC-135, KC-707/KE-3, KC-747, and KC-767 (all with refueling booms{except some B-707 tankers}, more than 2800 in all). McDonald Douglas (bought by Boeing in 1997) built or converted the KC-10 and KDC-10 (both with refueling booms, 63 booms). Airbus has converted the A-310TT (without a refueling boom) for the Canadian Armed Forces, and the test bed A-310TT with 1 refueling boom.

One boom, that is yet to fly does not equil any experience.

KC135,
True, Airbus have no experience in designing booms (refuelling pod: yes, if I'm not mistaken, but not exactly booms), but is that really necessary? I mean, it's mostly aerodynamics, and this is a field where Airbus can indeed look back on some experience.
Plus a little electronics. all high tech if Airbus wants to be competitive, true, but what's a boom campared to other burdens that make the life of engineers a little more interesting?

Quoting NoUFO (Reply 70): KC135, True, Airbus have no experience in designing booms (refuelling pod: yes, if I'm not mistaken, but not exactly booms), but is that really necessary? I mean, it's mostly aerodynamics, and this is a field where Airbus can indeed look back on some experience. Plus a little electronics. all high tech if Airbus wants to be competitive, true, but what's a boom campared to other burdens that make the life of engineers a little more interesting?

For the USAF, a refueling boom is vital, it has numerous advantages over probe and drogue refueling, a high rate of fuel transfer being the number one reason.

I have no doubt that Airbus can build a good refueling boom. It is just that they have not proven their design, yet. Yes, they do have the engineering experience to build one. They also have the benifit of being able to examine the Boeing boom on the French Air Force C-135FRs, but that is a 1950s design and I don't know if the French Air Force incorprated all of the updates the USAF did into their KC-135 booms. It is, AFAIK, still a cable and pully design control surface sytem for the ruddervators.

Quoting KC135TopBoom (Reply 71): I have no doubt that Airbus can build a good refueling boom. It is just that they have not proven their design, yet. Yes, they do have the engineering experience to build one. They also have the benifit of being able to examine the Boeing boom on the French Air Force C-135FRs, but that is a 1950s design and I don't know if the French Air Force incorprated all of the updates the USAF did into their KC-135 booms. It is, AFAIK, still a cable and pully design control surface sytem for the ruddervators.

This could be decisive in the technical evaluation phase. It could give political cover to the decision makers

Quoting Par13del (Reply 62): It seems o be a major failing of the US, Boeing is just another company

Are you serious?

Quoting Par13del (Reply 62): t to Europeans, Airbus is a source of national pride.

Quoting Par13del (Reply 62): How much better is the A330 than the B767 as a tanker aircraft? 5, 10, 15 20% better, what would the US loose if they chose the B767 over the A330?

It has far better range, fuel off load, take-off performance, passenger & freight capability/flexibility & is technically at least a generation ahead of 767; FBW, composites, etc. I think that if the kc-30 was a US made aircraft & the kc767 European it would have been a crushing win & would have been in service for years already..

The Aussies & Brits make a thourough comparison before they selected it.

I still think the best, cheapest way for the USAF to go on their tanker program is to upgrade the KC-135Es to KC-135Rs. The USAF already has a training program and maintenance program inplace for the KC-135R. The modification is still (relitively) cheap at about $29M per aircraft. The KC-135 airframe still has 40+ years of life left in it at current utilization rates.

Quoting KC135TopBoom (Reply 69): It is amazing how similar the Airbus Boom System looks to the Boeing Boom System, right down to the PDI (Pilot Director) Light System.

Why not ? I think this was done to make it easier for crews from other tankers to get their training on the A330, right ?

Quoting A342 (Reply 75): Quoting KC135TopBoom (Reply 69): It is amazing how similar the Airbus Boom System looks to the Boeing Boom System, right down to the PDI (Pilot Director) Light System. Why not ? I think this was done to make it easier for crews from other tankers to get their training on the A330, right ?

Maybe it's a "chinese copy"?  

And here is a 'carrot' to accompany the 'stick':

Pentagon may buy 15-20 aerial tankers a year

Quote: The U.S. Defense Department tentatively plans to buy 15 to 20 aerial refueling tankers a year over two decades, possibly from more than one manufacturer, the Pentagon's top acquisition official said on Tuesday. *** "So, if you're going to replace 400 to 500 (aging U.S. KC-135 tankers), and you're going to do it on the scale of something like 15 to 20 a year, it's going to take 20 years or so to replace them," Krieg said. Asked whether he might favor buying from two manufacturers rather than a winner-take-all approach, Krieg said: "It gives you management options when you have a mixed fleet of size."

Maybe Airbus shouldn't walk away from this after all. Could be quite lucrative...for both OEMs!

The RFI said no more than 15 airplanes per year, if the USAF buys no builds. But, I doubt the USAF will replace 400-500 KC-135s with a like number of new tankers. That is what they need to maintane current air refueling capability, but I doubt Congress is going to buy any more than 380 new aircraft. The limitation is number of booms in the air, not the amount of fuel in those tankers.

Even with 380 new tankers, not including the first year buy of 6, second year of 8 and third year of 12 airplanes, 15 per year after that takes 23 and a half years to build.

Quoting Lumberton (Reply 77): Asked whether he might favor buying from two manufacturers rather than a winner-take-all approach, Krieg said: "It gives you management options when you have a mixed fleet of size." Maybe Airbus shouldn't walk away from this after all. Could be quite lucrative...for both OEMs!

That sounds more like two different airplanes (med. and large sizes), not necessarly two different manufactures.

Quoting KC135TopBoom (Reply 78): That sounds more like two different airplanes (med. and large sizes), not necessarly two different manufactures.

That is the way I see it. I believe it will be a "large" aircraft and supplemented with existing KC-135's or a new "medium" size. Don't forget the Pentagon is moving forward with a new "stealth" air tanker which won't be avail for 10-15 years. I suspect that will have an impact on the final selection.

Quoting TropicBird (Reply 79): Don't forget the Pentagon is moving forward with a new "stealth" air tanker which won't be avail for 10-15 years. I suspect that will have an impact on the final selection.

The stealth tanker program may be canceled if a new tanker is bought now. The 10-15 year time frame puts it into the KC-10 replacement program, if this airplane gets a 20 year manufacturing period, the KC-10s will be simply replaced with these new airplanes.

Now, if USAF really wants to go for the stealth tanker, this program will not go beyond the KC-135E replacement.

Quoting KC135TopBoom (Reply 80): Now, if USAF really wants to go for the stealth tanker, this program will not go beyond the KC-135E replacement.

If the KC-X were a dedicated tanker, then I believe the above thought would be a certainty. But since it will also be a transport (think "large" category per the AoA), it can become a C-5/KC-10 replacement with the stealth aircraft becoming the primary tanker when it goes on-line. This way the USAF would not lose any investment in this "interim" large tanker.

Quoting TropicBird (Reply 81): If the KC-X were a dedicated tanker, then I believe the above thought would be a certainty. But since it will also be a transport (think "large" category per the AoA), it can become a C-5/KC-10 replacement with the stealth aircraft becoming the primary tanker when it goes on-line. This way the USAF would not lose any investment in this "interim" large tanker.

You are correct. But the realities of the budget and Congress (does Congress have any realities?), will not develope the stealth tanker.

Quoting KC135TopBoom (Reply 82): You are correct. But the realities of the budget and Congress (does Congress have any realities?), will not develope the stealth tanker.

I thought I just read where the USAF awarded a contract to work on the stealthy tanker concept and besides, what good is a stealthy UAV when it needs to be re-fueled on the front line by a non-stealthy tanker?

They need a stealthy tanker and the only debate I have read this whether they can make it an unmanned tanker aircraft.

Quoting TropicBird (Reply 83): I thought I just read where the USAF awarded a contract to work on the stealthy tanker concept and besides, what good is a stealthy UAV when it needs to be re-fueled on the front line by a non-stealthy tanker? I have not heard of any stealth tanker contract awarded yet.. But, you are correct any tanker refueling a stealth aircraft gives its position away, which is why the USAF wants a stealth tanker. They need a stealthy tanker and the only debate I have read this whether they can make it an unmanned tanker

Making any UAV that would only require a pilot is relitively easy now. The more crew positions an airplane has, the more difficult it will be to build a UAV/UCAV. In an unmanned tanker, designing a system that removes the Boom Operator would be difficult. Not impossible, but truely difficult.

Quoting Keesje (Reply 73): It has far better range, fuel off load, take-off performance, passenger & freight capability/flexibility & is technically at least a generation ahead of 767; FBW, composites, etc. I think that if the kc-30 was a US made aircraft & the kc767 European it would have been a crushing win & would have been in service for years already..

Funny, this quote sounds vaguely familiar, like someone comparing the 787 to the A350..  

Quoting RichardPrice (Reply 3): Airbus could also create a wholey funded subsidiary company

Another option might be to create Holy Owned Subsidiary in the Vatican and this might qualify as a faith-based initiative thus winning many brownie points. But more seriously, is the status of the A-330 MRTT all that clear. First, I suppose it qualifies under the various headings of the launch aid agreement - Richard Price, can you help here? Second, how much of its launch aid has been repaid. BAE only seems to want to let me see its 2000 financial data, but back then it was paying back GBP100 million or so a year, presumably all or mostly on the A-330/340 grants. At that rate, you would have to think that they might have made a hole in the liability by now - but BAE does not seem to want to tell me.

If launch aid repayments are still being made, would these also come from any KC30 production? For that matter, will they come from the frames for the RAF and the RAAF? And if by any chance all launch aid has been repaid, would the royalty per frame still apply?

These are perhaps tricky questions in the US context. I can see Airbus being able to tell the US that how it finds finance is its own business is one thing. However, telling the US Government that because of the way it was financed, it will be paying part of the price received back to European governments might be a bit different.

So this issue might really be confusing as opposed to the confusion that seems to arise over the relatively simple matter of launch aid itself! But then nowhere near as complex as some of the politics that have been invoked by other contributors. Such as criticizing the French and Germans for having their paws in the Iraqi oil cookie jar, and failing to give even an honorable mention to the Australian Wheat Board which seems to have taken the kick-back cake (and eaten it). Also one would be remiss not to note that the Afghanistan war with the Russians was where the CIA seems to have launched our friend Osama on the world stage - so marking a major stage in the development of blowback theory. All of which brings us back to:

Quoting A342 (Reply 1): Watch out for European politicians asking Boeing about their subsidies when there is a military competition running in which Boeing takes part

It would be surprising (and probably unfortunate) if the US industry were to take a cavalier attitude to the possibility of action against Airbus not being a one way street.

Meanwhile, down here in Ostraya, we are searching for this 21st century holy grail of fair trade, and even with our spirit levels and GPS units, we are far from finding "level playing fields". And you guys from the US don't be too hard on our wheat farmers, where else could you sell second hand Sea Sprites?

Quoting Baroque (Reply 86): It would be surprising (and probably unfortunate) if the US industry were to take a cavalier attitude to the possibility of action against Airbus not being a one way street.

If it were a competition involving a German, French, Spanish, or UK defense procurement, then why wouldn't these governments be within their right to demand reciprocity? I see no problem here if they did. However, this is the U.S. DoD setting the conditions for an American defense procurement. If one of the EADS members wants to reply in kind, this would be a legitimate exercise in their sovereignty--just as it is here with the U.S.

Again, this must be viewed broadly in the context of the entire Airbus subsidy issue, not just the tanker issue.

Quoting Lumberton (Reply 87): Again, this must be viewed broadly in the context of the entire Airbus subsidy issue, not just the tanker issue.

True, but would it not be better to say the issues of funding for both Airbus and Boeing?
And that brings up the issue I raised over the status of replayments of A-330 launch aid. Can anyone enlighten us? Just extraploting the old BAE data, you would have to suppose that not much is still outstanding. It is even possible that an enquiry might find that there is now no launch aid outstanding. What then?

[Edited 2006-05-21 16:53:26]

Quoting Baroque (Reply 88): It is even possible that an enquiry might find that there is now no launch aid outstanding. What then?

If that's the case, EADS should state it. But whether or not there is no aid "outstanding" is not the issue as I understand it. One couldn't focus merely on the KC-30 version, but the commercial progenitor--the A330. I am viewing your comment within the context that loans were granted, but may have been paid back. Is that correct? The discovery action in the tanker RFI relates to the overall issue of subsidies, not loans or aid that is "outstanding". My apologies if I misunderstood your intent.

[Edited 2006-05-21 17:18:31]

Quoting Lumberton (Reply 89): One couldn't focus merely on the KC-30 version, but the commercial progenitor--the A330.

I agree. It does not appear that there is an argument that they are two different planes. However, the extent to which the KC-30 and the A-330 are separate, or a single issues, may depend on which aspect is being examined.

The matter of repayment of launch aid might become important in different ways also. If it is has been repaid (or will be by the time an enquiry gets under way) that puts it in a different context compared with there being outstanding loans. But repayment could raise the royalty per copy issue. Would that condition apply to the KC-30?

As far as the A32x is concerned, this seems to be where the UK Treasury is currently making a "bit of a killing". If I can read the BAE reports and the parliamentary committee proceedings correctly (not necessarily the case), then launch aid is not really a full description of the activity. There appears to be form of residual override.

Again, if my interpretation is correct, it would mean that some of the complaints about launch aid are not always well directed, but there might at the same time be different complaints that might have more force. However, I have no idea whether the idea of there being a residual override (or whatever it might be called) is more or less appealing.

BAE seems to be fairly clear about how much is paid, to whom and for what. I assume that EADS is responsible for the other parts of the launch aid and your suggestion that they could be more informative is probably true although I have not trolled their websites.

Quoting Baroque (Reply 90): Quoting Lumberton (Reply 89): One couldn't focus merely on the KC-30 version, but the commercial progenitor--the A330. I agree. It does not appear that there is an argument that they are two different planes. However, the extent to which the KC-30 and the A-330 are separate, or a single issues, may depend on which aspect is being examined.

I disagree on the KC-30. The USAF tanker aircraft have always been based on freighter versions of new build aircraft (the KB-29 and KB-50 were conversions of exsisting aircraft). Even the KC-97F (the first production KC-97) was based on the end of WWII C-97A. The KC-135 was based on a cargo version of the B-367-80, and the KC-10 based on the DC-10-30F. Even the airplane that competed against the KC-10 in the ATCA program, the B-747 was based on the B-747-200F airframe (but the prototype B-747-100 and one IIAF KC-747-100 did the actual flying).

Today there is a freighter version of the B-767, but only a proposed A-330F. Freighter versions of aircraft are very different animals than their passenger counterparts.

While I do agree the A-330-200F and B-767-200ERF are vastly different airplanes, I disagree the A-330 is much better suited for a USAF tanker than the B-767. Even the USAF doesn't really seem to know, at this point, what they really want for capabilities in a new tanker. For example, if size of the airplane is no longer a factor, than USAF might as well consider the B-777-200LRF, B-747-800F, B-747-400ERF, and an A-340-500F as a possible KC-135E replacement, along with the A-330-200F, and B-767-200ERF. They could also consider a tanker version of the B-737-700ER, the B-787-800, or even ask Airbus to offer the A-310-300TT and a version of the RAAF A-330-200MRTT, or a tanker version of the A-320.

The article in the thread starter refers to launch aid, but the most recent official reference I can find calls these funds repayable launch investment (RLI). This comes from:

House of Commons Trade and Industry Committee The UK Aerospace Industry
Fifteenth Report of Session 2004-05 Report, together with formal minutes Ordered by The House of Commons to be printed 22 March 2005 GBP12.00

It can be presumed that the change from launch aid to RLI derives in part from the WTO dispute, but a reading of the document suggests that RLI is a much better description. One might even wonder if the term launch aid should be banned from these threads!

The House of Commons report also contains the information that UK Liabilities relating to Airbus for the A330/340 programme were GBP46 million at 31 March 1998 and GBP33.0 at 31 March 1999. The only other Airbus liabilities listed relate to the 1978 principles of Cooperation with the French and German Governments which are stated to be unquantifiable. If you want to dig, that might be an interesting field in which to sink a spade! But that is the only liability listed for RLI, which seems to be the target of this thread.

We know from BAE that they completed repayments on the A32x in 1999 so the lack of mention of other programs in the Liabilities list indicates that in 1999 there were no other liabilities. The A340-500/600 wing program had not cut in at that stage.

At that rate of decline 46-33 in one year it is likely that the A330/340 program was paid off either in 2000 or 2001 and no later than 2002. Yes, I know it is not done to extrapolate from two points, but it is fairly clear that the liability for the A330 was not far from zero by 2000 - except of course for the other part of the RLI is the ongoing Royalty component.

So apart from the repayments with interest part of the deal, there should by now have been about 4 or 5 years of straight Royalty repayments on the A330 (and the first A340) program as well as over 6 years of straight Royalties on the A32x. No wonder the UK Treasury seems quite keen to help.

It is difficult to believe that the other 80% of Airbus has not been keeping up its payments. If it did not, you would think that BAE might have mentioned it.

Do I hear the brakes going on for a turn to attack state risk participation in commercial aircraft?

Quoting Baroque (Reply 92): The House of Commons report also contains the information that UK Liabilities relating to Airbus for the A330/340 programme were GBP46 million at 31 March 1998 and GBP33.0 at 31 March 1999.

So, politician believe the launch aid, opps, RLI for the A-340/-330 program is fully paid back to the British tax payers?

Airbus paid the British Treasurey 13M Pounds Sterling in one year?

If the British politicians are as "honest" as the US polticians are, I can see where we can trust them.

Yeah, right  

Quoting KC135TopBoom (Reply 93): Airbus paid the British Treasurey 13M Pounds Sterling in one year?

Not only but also!! I like reading your posts TopBoom, and I am confident you have forgotten more about tankers than I will ever even want to know, but dare I suggest that once you get onto the subject of RLI ...... At least you are in good company. The BBC in 2005 opined "The launch aid Airbus hopes to get for its A350 would only repayable if the aircraft was to fail to achieve decent sales; not exactly a loan granted on commercial terms." What they should have said was that the RLI would be repayable out of sales, and on if the A350 was to fail to achieve targets would it be repaid from other Airbus fund. And yes, they should have written would only be repayable, just one of their mistakes!

The March 2005 House of Commons figures (see http://www.publications.parliament.u...05/cmselect/cmtrdind/151/15106.htm
for one version of this document) show that from 1982 to 2004 RLI expenditure was GBP2,039 million and repayments during that period amounted to GBP1,639.

That would correspond to an average repayment of GBP71 per annum. And earlier documents tell us that outgoings were GBP55.8 in 1998-99 and expected to be 71.9 in 1999-200 and 57,8 in 2000-2001. During those years repayments were GBP101 million in 1998-99 and expected to be 127.4 in 1999-2000 and 124.7 million in 2000-2001. The main repayments came from RR 40% in 1998-99 to 16.7% in 2000-2001 and Airbus - basically the rest.

If you take the GBP530(A380) + GBP450 (Trent 900) out of the totals, on the grounds that the A380 has not reached EIS, then you have grants of GBP1059 for earlier projects and repayments of GBP1,639. Somebody else can do the calculations of returns, but clearly repayments CAN reach 160% of the initial amounts. And the repayments will continue to rise until the A32x and A330/340 programs are terminated.

Unfortunately, nowhere does there seem to be a full listing year by year of expenditures and income, but maybe we will be able to reconstruct it from various year by year snapshots. It is clear that there have been periods when RLI income has exceeded expenditure. The current net debt is largely due to the A380 program. (No this was NOT an invitation to stomp on the Whalejet, just stating the bleeding obvious.)

Equally, the current income is largely from programs where the initial outlays have been repaid where income is still obtained as Royalty payments per copy sold. This income mainly comes from A32x but a substantial portion also appears to come from the A330/340 program. Presumably most of this last is biased towards payments for A330s. But apart from data in 1999, I cannot find year by year payment data for the A330. If you go through the basic RLI agreement, is may be possible to work out what the overriding Royalty is per frame.

I know it could be disappointing to find that Airbus does pay the UK Treasury, but indeed it does and repayments were estimated at about GBP124 a year in 2000-01. Since then Airbus deliveries have increased, so it is reasonable to assume a fall off in RLI REPAYMENTS and a rise in ROYALTIES. All that will change as the A380 deliveries start.

It is difficult to know why they dont present all these data in a form that is easier to access. I guess the WTO evidence may provide just that. But I think we can take the House of Commons publications and the BAE reports as containing fact - my support for that daring suggestion is that you tend to go to jail if you publish incorrect data in either of those forums. However, prove me wrong with facts and not assertions that are easy to disprove.

For those who follow this stuff, RP was perfectly correct about any company being eligible if resident in UK, Short received RLI for the Lear 45, so Bombardier are on board as they say.

Quoting Baroque (Reply 94):

Baroque, you have made some very good and informative contributions to this thread. Many thanks.

I think that we are missing the real advantage on RLI, launch aid, non-repayable loans, etc. Regardless, of what shape it takes, or what the terms are, it affords EADS a decisive advantage by significantly lowering the risk on a project. [Disclaimer: I can't take credit for this insight. It was pointed out to me by another a.netter with a production background.] If one has to go into the capital market, secure funding, and then evaluate a project, one must take risk into account. The hurdle rate, driven by the higher risk premium, will be substantially higher in the case of a project without access to the 'government sponsored' type of financing. This could be critical in a "go" / "no go" decision analysis. If I remember the Capital Asset Pricing Model from my B-school days, risk can significantly increase the hurdle rate for an internal rate of return scenario.

[Edited 2006-05-24 16:02:09]

[Edited 2006-05-24 16:02:59]

Quoting Lumberton (Reply 95): isk can significantly increase the hurdle rate for an internal rate of return scenario.

Thank you for the kind words. I guess once you has picked your way through the numbers, it emerges that the whole basis of financing is different from those that might be considered as the norm, except that in a sense, RLI becomes the norm for Aerospace in Europe. It is impossible to tell what questions are asked before the RLI is granted. "Each project is different and therefore the terms and conditions vary. ...... After the contracts have been concluded, the DTI holds regular meetings with the company to monitor the progress of the project" (op cit, p27).

It is not stated how DTI (Department of Trade and Industry) assesses risk, but it appears that it does. However, the really important point is that Airbus has to repay even if the project fails. To that extent, the risk falls back on Airbus. The talk about grants and only repay if they fancy, obscures the bone in the heart of these RLI moneys. If the project is not a success, then Airbus takes on ALL the risk, its own and the RLI part as well.

So the RLI is not a fall back in case the project fails. Rather it is a certain way of that part of the finance having to be repaid regardless.

Presumably, Airbus can now take a different view of risk compared with the earlier days because it has the A32x to fall back on. Equally, one might presume that Airbus will still try to ensure it does not get into such a risk sensitive position again. And one might also conclude that Airbus will be really keen to keep the A32x going for a whole range of reasons.

So I assume that Airbus does calculate hurdle rates and that it will have to be doubly careful knowing that it will have to repay the lot if the project fails. Does that help?

The main complaint should perhaps be put back on the various Treasuries. They have a system where their risk is controlled by the one that Airbus ceases to trade. Otherwise, they are sitting pretty, they get paid regardless. Does that seem familiar across the Atlantic (or Pacific in my case)?

Mind you just the sight of hurdle rates in my field (mining and oil) brings a glazed look. Sure they are used, but we know perfectly well that whatever price assumptions are made, they will be wrong over most of the life of the project. This results in hurdles tending to be set artificially high and guess what results from that!

Quoting Baroque (Reply 96): So I assume that Airbus does calculate hurdle rates and that it will have to be doubly careful knowing that it will have to repay the lot if the project fails. Does that help?

Thanks for the info. No doubt Airbus does internal capital budgeting, but my point was that risk premium is different for a government sponsored loan, even one that has to be paid back at competitive lending rates, vis a vis a situation where a company has to go into the capital markets and get financing. I would submit that it still confers a decisive advantage, if for nothing else one doesn 't live by the "quarter to quarter" expectations (realistic or otherwise) demanded by the markets.

Quoting Baroque (Reply 96): Mind you just the sight of hurdle rates in my field (mining and oil) brings a glazed look. Sure they are used, but we know perfectly well that whatever price assumptions are made, they will be wrong over most of the life of the project.

Agreed! However, the bean counters can leave a project stillborn if the "assumptions" don't pan out.

Quoting Baroque (Reply 96): except that in a sense, RLI becomes the norm for Aerospace in Europe. It is impossible to tell what questions are asked before the RLI is granted.

Good point. The lack of transparancy gives rise to all sorts of assumptions and leaves one free to draw conclusions, erronous or otherwise.

BTW, do you think that the WTO case will ever see actual hearings? My strong suspicion is that this will be resolved, albeit to the satisfaction of a very few, due to the "spill over" in even more politically sensitive areas, like agricultural subsities, etc. Both sides will declare victory and move on....

Quoting Lumberton (Reply 97): BTW, do you think that the WTO case will ever see actual hearings?

A very interesting question. However, I have no expertise whatsoever on this. The EU seem very confident and so does the US. Reading what is available, I can see more evidence to support one than the other.

You then need to wonder what will control the "rush to war" for war it will be. My guess is that the Europeans will stand in the belief that they are correct, dare one say especially some of the Europeans. The US has tended to be pretty aggressive and, equally, will not want to back off.

If I was running both sides, I would advise one of them to settle but I aint gonna say which!

I wonder if any contributors know about this form of negotiation, we might get a view informed by the realities of this kind of fight.

Quoting Lumberton (Reply 97): BTW, do you think that the WTO case will ever see actual hearings? My strong suspicion is that this will be resolved, albeit to the satisfaction of a very few, due to the "spill over" in even more politically sensitive areas, like agricultural subsities, etc. Both sides will declare victory and move on....

Quoting Baroque (Reply 98): A very interesting question. However, I have no expertise whatsoever on this. The EU seem very confident and so does the US.

I agree, this WTO question will never have a hearing.