And the Winner Is: Suprise!!

It's Boeing! Yeah, I am caught surprised as well. I never figured those USAF Pin Heads would have done this and award to Boeing what will be at least $35 Billion dollars in aircraft. Boeing pitched a "Next Generation" Tanker built on the 767 airframe. They build something similar that is in operation with Japan and Italy. They need to ramp up quickly and get these airframes in the air.

Good on them, in these economic times it makes all kinds of good sense to keep this program at home even if a lot of it is built off shore and brought here for final assembly.

I expect there to be some legal gymnastics and I hope it is held to a minimum and that Boeing gets moving building these aircraft. The Boy's in Blue could sure use them as those KC-135's are very long in the tooth. They must cost a bundle to repair and maintain and most are older than the Wing Commanders much less the actual air crews.

Not sure what I am going to write about in the future, this was good fodder!!

BT: Jimmy T sends.

KC-X Tanker Wars - Award in Sight

The USAF may announce as soon as tomorrow 24 February, the winner of the long delayed and protested replacement for the KC-135. There has been a lot of activity in recent weeks. Each competing company has submitted updated cost proposals and rumor has it that EADS has the lowest raw number.

Supporters of the Boeing aircraft tried to get the USAF to throw out the model they are using to “equalize” the cost differences between the two radically different sized airframes being proposed. The Boeing supporters feel that the model (called IFARA or Integrated Fleet Air Refueling Assessment model) bends in favor of the larger airframe. This model was devised to level the playing ground but some folks think that not enough of a penalty is assessed to an airframe that would require a substantial additional cost to the Air Force in the form of building larger hangers and reinforcing runways, taxiways and ramp area for the larger and heavier aircraft.

Plus, EADS being a less-than-for-profit business affair can set the price of each airframe with no consideration of making a profit since the partner governments that own the parent company (Airbus) are primarily concerned with jobs the ultimate cost can be way less than an airframe much smaller than the A330 they proposed. This makes for a huge bias towards the EADS bid and this huge award going overseas.

And I know, EADS claims that they will open another production line here in the US but I think what they will do is simply set up a facility where they only fit-out a completed tube with the classified communications gear this aircraft will have to have installed. So, there will be jobs here in the US but they will not be nearly what are being claimed in the EADS propaganda.

So, stay tuned. A legal crap storm may break out as early as Friday!!

BT: Jimmy T sends.

Tanker Wars - Update

Time for some KC-X Tanker news. The original a time frame for the award of this long awaited program has slipped into February however; this could slip as well since the Senate took up hearings on the program.

Specifically the Senate is looking at the inadvertent release of proprietary cost data from one bidder to another. So, no telling how much this meddling will cost the program. Now, that is not to play down the seriousness of a release of this nature but to keep the wheels on this apple cart you have to find out if the data actually caused comprise. A forensic examination of the computer system used by an EADS Administrative employee was conducted by the Department of Defense Cyber Crime Center. They determined that a single page in one document was opened for 3 minutes. EADS claims that the people only looked at the data for about 15 seconds and claim no harm no foul. But they did move this person to another area not related to the KC-45 program which is the aircraft in their offer to the Air Force. Boeing testified that they did not open their set of data which was supposed to go to EADS. It seems their Administrative employee was smart enough to look at the labeling on the CD’s and see that it was proprietary to EADS and stopped. Bigger story here if you want.

In other news Boeing bowed out of the Indian Indigenous Tanker competition claiming they wanted to focus on the USAF KC-X program. Yeah, maybe they don’t want to get into another pissing contest over the size ambiguity in these requests for Tanker aircraft. The two aircraft the KC-767 and the KC-45 (based on an Airbus A330) are nowhere near the same size standard and since Airbus had so much help funding the building of the baseline aircraft it is very hard for Boeing to compete. I can understand that, if you are given the airframe for free you undercut anyone else trying to bid against you that had to pay for their fuselage out of their own pocket, and since no one seems willing to penalize Airbus for these illegal subsidies (to the tune of $200 Billion dollars, per the WTO) then you should walk. (WTO Story here)

Over in EADS land they had some interesting news. During a test of their A330 MRTT aircraft their much vaunted advanced Boom fell off. While in contact with an Spanish Air Force F-16. Both aircraft sustained damage and both returned safely to mother earth. I am sure the flight suit in one aircraft had to be changed, when you see that huge boom apparatus falling on you while you are at 15,000 feet I am sure you leave spots in the poopy suit. From Flightglobal is the big story but here is a quote from airbus:

”The boom detached at the root of the structural mast," says Airbus Military, responding to questions from Flightglobal. "There is no damage to the boom attachment, nor is there any significant damage to the [aircraft's] fuselage," it adds.

Photo from Airbus/EADS.

Meanwhile later in the month: “The Airbus Military A330 MRTT successfully passed fuel to receiver aircraft using the Fuselage Refueling Unit (FRU) for the first time.” (Source is Flightglobal, again) The FRU is the hose and drogue unit that is mounted on the aircrafts fuselage centerline (it is also equipped with wing mounted hose and drogue units). This is good news; Airbus had been having a lot of trouble getting the FRU to work. I guess getting that pesky Boom thingie out of the way really helped.

Well, I am sure Lawyers are circling just waiting to be called in and for Protest fire support in both camps. Even with an award today this program is far from over.

Shame on the DOD and USAF for doing such a lousy job all around on this program. Like the vampire that it has been it is almost time to put a steak into it and end all the misery.

BT: Jimmy T sends.

Thanks to http://www.alert5.com/ Great site for up to the minute aerospace and military aviation news.

Tanker Wars/KC-X Winner - Airbus?

In todays Tanker Wars update we have this breaking news - Airbus is the apparent winner of at least the technical side of the competition. Here is the Story. The upshot here is that Airbus scored many points on the larger size aircraft they proposed than Boeing did with their KC-767 Next Gen tanker proposal.

The competition now goes down to cost and my thoughts are that Boeing doesn't stand a chance. Despite the A330 being a much larger aircraft to build and correspondingly higher costs to build, Airbus will still out bid Boeing. Remember folks, Airbus is NOT in this competition to build aircraft or to make a profit, the partner governments which fund Airbus simply want to keep people working building aircraft in Europe. Even though Airbus claims they will spend huge money building a "post" production facility in the USA, it will only be a token effort in the end because they really only want to keep europeans employed with this effort.

Boeing on the other hand has to make a profit and they can not compete against a business model that does not.

Plain and simply, our air borne war fighters will be taking gas from an aircraft built by socialists!!

Its really too bad that the US defense industrial complex could not defend itself from a hostile takeover of this magnatude. What next, will the next Air Force 1 be an Airbus?

BT: Jimmy T sends.

Aviation News Roundup

Here is some news from the Aviation world that is not makeing too big a splash on the MSM.

Boeing 787 Troubles:

This latest in the long line of commercial haulers from Boeing was well on its way to certification and delivery to an actual paying customer however, all flight testing of the 6 test aircraft was suspended recently after a fire in the #2 test aircraft. This aircraft was on approach to land at an airport in Laredo, TX when the fire broke out in the aft electronics bay. The resulting load shedding to the redundant load center on the other side of the aircraft left the cockpit with a single flight instrument to land the aircraft. The pilot at the controls at the time of the fire: an FAA Test Pilot.

The reported source of the fire as a power distribution panel which are not like the power panels in my beloved S-3. These are highley specialized panels that are as much a computer with embedded programming on them as they are a circuit relay. The modern trend in aircraft is to be more reliant on electrical flight controls (Fly-by-Wire) instead of hydrolics or steel cables. So, there is a lot of dependance on the electricity generated onboard.

The fire was fierce enough to get insulation in the avionics bay to ignight and molten metal dripped onto the inside surface of the composite outter skin of the aircraft. That may comprimse the integreity of that material and a study of the damage is underway. The 787 structure is made mostly of composite materials so this may be one of those failures that derive a lot of knowledge from.

Airbus A380 Troubles

Airbus is also at witts end with an incident that occured late last month. A Quantas Airlines A380 experienced what is called an "uncontained engine failure". In plain speak this is an engine failure where part of the motor is ejected from the motor housing and into the aircraft. The wing in this case. The part went up through the bottom of the wing and severed hydrolic lines and electrical cables before exiting out of the top of the wing. Oh yeah, and a fuel line as well. They were very lucky that the path of that part did not include the fuel tank itself. And that is what makes an "uncontained" failure a big thing as opposed to say a simple engine failure where the parts stay inside the motor housing.

Here is a picture of the damage on the top of the wing, this is where the parts have exited the wing.
Picture stolen from some where on the internet, I forget now. Sorry.

That's a pretty ugly exit wound there folks. That discoloration in the hole on the right is a liquid leaking out that is significantly cooler than the wing itself. Like fuel. More pictures here from Airbus (they are ugly).

All operators of the A380 grounded their aircraft pending the results of the investigation which centered on an oil leak. Many of the operators have commenced to removing the Rolls Royce Trent 900 engines which on inspection indicated an oil leak of some kind.

This was the second time in a very short period of time where a Rolls Royce motor has had this kind of failure (the uncontained type), the first being a test engine for the Boeing 787, a Trent 1000 motor. This engine was on a test stand when the failure occured. The 787 is offered with two different motors which operators can select so Boeing is not in a pickle over the problems over at Rolls Royce. Similarly Airbus sells the A380 with a different motor but customers decide which motor they want and they usually pick one from a manufacturer with whom they already have motors in other aircraft.

Eclipse back on its Feet

Eclipse 500 taken from the Eclipse website.

Good news from my home town, Albuquerque. Eclipse Aerospace took over ownership of the former Eclipse Aviation which went into bankruptcy. The new company has focused on getting a support and logistics train up and running for the 260 odd aircraft delivered before Eclipse went under. In a program they call "Total Eclipse" which the primary goal is to buy back aircraft, re-furbish them to a single production standard and then resell them.

They are doing gang busters in this effort having completed more than 50 aircraft and now there is talk of possibly opening the production line and building new aircraft. What a good deal that would be.

And that's not all, they have gained certification from the FAA for Flight into known Iceing conditions and for flight above 40,000 feet. These are big.

In a perfect world these guys get back to going strong and they can open the production line again. Whis is a wonderful concept for an aircraft and represents a fundemental change in building aircraft. Me things the previous owners bite off more than they could chew.

In other Eclipse news Sikorsky Aircraft recently bought an equity stake in Eclipse Aerospace giving Eclipse a much needed infusion of funding and major corporate stability. What is in the deal for Sikorsky? Who knows, maybe they want to make a tilt rotor version of the Eclipse 500 aircraft. Works for me.

USMC to "Harvest" more Bad Guys

The USMC deployed the first and only KC-130J aircraft with the "Harvest Hawk" modification installed. This modification gives this particular aircraft some teeth that your normal refueling aircraft does not have. The Harvest Hawk modification includes a 4th generation EO/IR Ball that gives them a great picture day and night of activity on the ground and a laser capability as well (for range finding and target desigination). The teeth in the system is the addition of 4 Hellfire missiles mounted on the outboard wing pylon and 10 each Griffen GPS guided Air to Surface missiles. The Griffen is a smaller sized missile than the Hellfire and uses the GPS to home in on a position. I knew nothing about them so I did a little digging, here is something on them. These are mounted on the Cargo Bay ramp allowing for the system to be removed in a case where the aircraft is needed for purley cargo purposes. A neat trick.

The Misguided Children have done what they do best: adapt, improvise, overcome and then kill the enmey.

China C919 to Compete with Boeing and Airbus

Huge air show over in China of all places, the Zhuahai Air show 2010. One of the exhibitors is Comac, the Chinese National Aircraft builder, the Airbus of China and just like Airbus they are owned by the government. Their big news, they are going into production on C919 single asile passenger aircraft. They announced that they have advanced orders for over a 100 aircraft and will deliver their first "revenue" aircraft in 2016. The aircraft will carry between 150 and 190 passengers and is designed to compete with the Boeing 737's and the Airbus A320's.

Picutre of a C919 full scale mock-up as displayed at Zhuahai 2010. Picture taken from rediff.com.

Comes with a pretty nifty glass cockpit and a Heads Up Display. This is interesting on two points, the first is that it is another government sponsered enterprise competing with Airbus. Like Airbus making a profit is secondary in their business planning. This is another massive Jobs program and more importantly it is their graduation onto the world stage of techonology. No longer do they only mass manufacture toys and trinkets. They are capable of making passenger aircraft all on their own.

Picture shows the C919 cockpit with HUD's and a line of Glass Flat Panels that seems to go on forever. Two of them in fact. The engine monitoring system are in flat planes also. Picture taken from rediff.com.

This brings up the second point, that is how much of this knowledge they learned at the hands of Boeing. Yes, Boeing had a huge hand in teaching the Chinese how to build that aircraft. Oh, they did not start out duplicating whole aircraft, but Boeing went to China many decades ago to get small parts manufactured for them in exchange for the many national airlines purchasing Boeing product. This over the years morphed into bigger and bigger parts. Whole sub assemblies of aircraft are now built there and the Chinese have turned all this gained knowledge into well, the C919.

I mentinoned in a post back last year that Boeing should have been spending all that money and energy to develop alternate suppliers in Mexico. It would have resulted in lower transportation costs and more importantly, they would not be using that knowledge against them. Oh well. Live and learn I say.

I'll have more Aviation news soon, there is a starteling Tanker Wars update coming.

BT: Jimmy T sends.

Boeing versus Airbus - I Rant

It’s no secret around here that I do not like EADS/Airbus (not necessarily their products) and most especially in their competition with Boeing for the future of Big Wing Tankers in the USAF (known as the KC-X program).

I have been doing some reading more and more lately on the posturing between the two companies both trying to use the press and various public meetings (Associations and Conferences) to game the KC-X in their direction. It is understandable given the shear amount of money at stake.

For many years I would not book a flight on an Airline that had Airbus products in their inventory. I did not want to take the risk of wanting to get home and riding on an Airbus aircraft. Now this was not an irrational fear, it was based on how aircraft are certified in the US versus Europe and in the general philosophy in who or what runs the cockpit and what actually fly’s the aircraft. But, with all the consolidation that has occurred in the Airline business the fleets have not become mixed (except for Southwest but they don’t fly to Europe). These issues are not why I am not an Airbus advocate in regards to the KC-X program. They are more personal and subject of another post.

But what is it that really gets me going about this? Why do I have such animosity towards Airbus? Well, it’s because they are over here competing against US companies using our system against those very companies and all the while shielded by virtue of how they are organized and their business motives in the first place.

Let me try to explain.

Boeing is a “for profit” business. At the end of the day, they have to turn a profit. They owe that money back to grow the company, to expand their capabilities, conduct R&D and build new and upgrade their existing facilities (I am sure they are getting that Green Agenda shoved up their Ass too). And they also have to post a dividend to their investors. If they don’t do these things, especially this last item, they go out of business.

They are first and foremost a business proposition whose first rule is to make more money than it takes them to operate.

EADS/Airbus on the other hand is not such a company. Their first priority as pushed by their ownership is Jobs. That’s right, Jobs. You see, EADS/Airbus is what we call here a GSE – Government Sponsored Enterprise. As such the partner governments participate simply to put people to work. They actually negotiate in which country parts of the aircraft are built to keep folks in work or when they expand they negotiate a pro-rated share between themselves.

You see the “Investors” in EADS/Airbus are governments that do not care if the company itself makes a profit. In fact when the company is losing money on a project the governments all get together and decide on how to split the bill to make up the loss.

In the long and twisted development of the Airbus A380 the world’s largest commercial passenger aircraft, the company either miss-managed the program or vastly underestimated the complexity of building an aircraft of this dimension (most likely IMHO). To the tune of $3-Billion Dollars (which increased the per aircraft price by 25%). That is a huge number by any standards. But, the governments which all share in the EADS/Airbus consortium coughed up that overrun in order to keep the Job’s created by building that huge aircraft.

And that is not the only case, the A340 was heavily subsidized and so was the A330 aircraft which is the offering that EADS has in the KC-X competition (to the tune of $5 Billion on that airframe alone). More recently, their new Military Airlifter the A400M is also way over budget and getting extra influx of overrun money. And Here!

And that’s not all folks. As part of it’s overhead expense that Boeing has to deal with is the cost of Health Care and Retirement or Pension payouts which EADS/Airbus does not have on its ledger. You see, in all 4 of the countries in the Airbus consortium the government provides both the Health Care and the Pension for the employees of the Airbus company.

How is this fair to Boeing, to the USAF or even to the USA?

Oh many will say that Boeing gets plenty of subsidies in the way of US Military contracts or offsets in local and state income taxes. But these are stalking horse arguments. While the parent company holds domain over the entire company, the Commercial and Military parts are operated as separate cost centers. Each has to perform on its own independent of the other. So, the Commercial Airplane Company gets no benefit by the Military side winning contracts. As for the deferral of taxes at the local and state level, I can’t see how that would amount to enough to even argue about especially since most of this is granted as Tax Credits which come out on a year to year basis AT THE END OF THE EACH YEAR. Not a lump sum payout as is enjoyed by EADS/Airbus.

No it’s not fair by any measure.

My personal feelings are that the US Government should not allow competition between US manufacturers and offerings from the EADS/Airbus consortium unless they are penalized for these disparities or at the very least; the US Company is given a leg up in some way.

Not sure how this will play out in the KC-X program however the USAF is in that most unenviable position of being between a very big Rock and an even bigger Hard Place. Almost no room to get it right. Read more Here it is a Report by the Lexington Institute on the impact Airbus has on the US Aircraft manufacturing business.

BT: Jimmy T sends.

Tanker Wars Update - Long Overdue

It’s has been awhile since I have said anything about the Air Force Tanker Competition or KC-X as it is known. Well, not that anything is going on right now but here is a quick and dirty summary of activity on this huge contract that I have been holding onto.

First, the proposals are in and the Air Force is busy studying and evaluating them. They received two, one from Boeing pitching their Next Gen Tanker (a modified KC-767 based on the version they are building for Italy and Japan) and another from EADS/Airbus.

The EADS offering is a KC-45 the A330-304 MRTT aircraft that they are selling to Australia and Germany. In fact, the German Air Force (the Luftwaffe) just recently took delivery of their first MRTT aircraft.

There was a proposal submission that was not accepted that has created some news. A California based company; US Aerospace Inc. threw in with the Russian aircraft manufacturer Antonov to propose an all new built aircraft tentatively named the AN-112-KC. This aircraft was going to be built to US Air Forces specifications, even though the USAF did not publish any, they wanted to buy something off the shelf, in the Ukraine and then flown to the U.S. for finally assembly. Story here and here if you wish to learn more, there is not much out there.

The US Aerospace Inc./Antonov proposal was 5 minutes late. It seems that the “courier” that was carrying the proposal to the Contracts desk at Wright-Patterson Air Force Base got lost after getting through the Main Gate delivering the proposal after the Bid Closing time. They have filed a protest with the GAO. (Story here.) Now I have been there dropping off a Bid Proposal for contracts of several thousand dollars, nothing like a $30 Billion aircraft manufacturing contract. I think I would have camped out in an RV right out in front of the Contracts Office. Shame on them. They feel so strongly in their position that they have submitted a second Protest, just to be sure they get heard. (That story here.) If they had shown this kind of attention to the original bidding process they would not have required all the legal activity now that only slows things down. The GAO is scheduled to rule on the Protests in early November however they have made a ruling on some of the claims made by US Aerospace Inc. Specifically, the GAO has dismissed the “bad faith or intentional agency misconduct” charges that US Aerospace made. Their claim was that the Gate Guard intentionally gave them bad directions from the main gate to the Bid submittal desk in the Contracts building. (Story here.) Can things get any more funny?

Boeing KC-X News:

Boeing is bidding the KC-767 that they had bid previously, but it appears they are changing the cockpit design but details are scarce. The rumor is that some format of the all new and state of the are cockpit that is being put into the new 787 Dreamliner will be put into the NextGen Tanker. The question really is how much of it will go into the KC-767, all or a portion thereof. (Story here.) This would be an interesting blend considering the need to install a fair amount of Military equipment that the civilian market does not worry about, like UHF radios, TACAN’s, PAR ILS systems and of course secure encryptions for the voice and data communications. They are answering most of these issues on the Navy’s P-8 aircraft which is a military configured 737 that will see service as an ASW aircraft (replacing the P-3). Time will tell.

Here is a story about how Boeing is out talking up having their ability to reduce it’s currently Bid price on the Tanker package if the USAF puts out a “Best and Final Offer” to the two bidders. They have left themselves some room to move their offer lower putting pressure on EADS/Airbus. Since the EADS/Airbus is a much larger aircraft, and presumably much more expensive to build the pressure is in forcing the issue to lower pricing. So the Boeing PR machine is out talking this up in hopes of getting the USAF to issue a BAFO.

EADS/Airbus responded that they have room in their bid to trim some of their pricing too. (Story here.) But right away Congressman and Senators sensitive to the Boeing bid complained that EADS/Airbus would be “dumping” their aircraft in order to gain the contract. This is the policy of bidding at a price well below of what it costs to build. EADS/Airbus has responded by stating they will not build the USAF tanker under the actual cost that it takes to produce (that story here) saying that they have a lot of cost capacity because of them building these aircraft for other countries.

Sometimes a manufacturer will do that in order to win the contract and then they nickel and dime the government for cost increases. This is known in these parts as the Lockheed Business Model and I refer you to the F-22 and F-35 programs for how well that works, which it does but surely leaves a bad taste. Especially if you are the taxpayer!

EADS/Airbus News:

Besides the above story on EADS/Airbus not spiking their pricing on their Tanker offering is this bit of unusual news. The UK’s Parliaments’ Public Accounts Committee criticized the UK’s Ministry of Defense for signing a $16 Billion dollar deal to lease Airbus A330 tankers from a consortium that was formed to specifically sell and lease A330 tankers to European military organizations. Ouch, that’s got to hurt. (Story here.) The deal was for 14 of the Airbus tankers over a 10 year period but the committee complained that the deal was not good for the UK because the aircraft will not have the protective equipment necessary for taking any aircraft into a war zone (you know like Afghanistan). Now you make that aircraft huge like an Airbus A330 and you got yourself a nice fat target so I would guess they are going to need a lot of extra’s on that bad boy and none of this is factored into the $16 billion cost. Oh well, live and learn. I once leased a car a long time ago and that was the last time I’ll do that. Must really hurt when you lease an aircraft!!

And if the above is was unwelcome news there is more for EADS/Airbus to contemplate. The WTO has ruled that both companies have received what they are calling “illegal” subsides. In the case of EADS/Airbus the subsides came in the form of “Launch Aid” which is money given to Airbus from the various sponsoring governments in the EU that prop up Airbus. Launch aid is money given to Airbus when they overrun the development of their aircraft which apparently happens on every aircraft they have built. The running total is a whopping $200 Billion dollars. (Story here.)

Meanwhile, the WTO ruled Boeing has been receiving “preferential” treatment by the U.S. Government which they translate into a prohibited “subsidies” to the tune of $24 billion dollars. (That story here.) The WTO claim is that contracts with the U.S. Government and even the tax breaks given to the many Boeing Plants around the country by both local and State governments has translated into “aid”. Maybe so.

But there is in my mind several critical differences between the two which I don’t think the EU leaning WTO understands, first of these is the issue of Launch Aid. When Boeing runs out of money when trying to bring a new aircraft to market they go back to their investors and raise the cash they need privately. In Europe, Airbus runs out of money they go back to the sponsoring governments and request however much they think they need and that is what they get. This is a big difference and continues even with their latest aircraft the A400M (which is a military cargo aircraft) and the new XWB-A350 commercial airliner (which is to compete against the Boeing 787). So they don’t feel the pain like Boeing does since Airbus has no “skin in the game” so to speak, Boeing wagers stocks in the company and their own profitability. Not so Airbus.

Another difference is that any defense work Boeing wins in this country is done in a robust competitive market. That is not true in Europe where a lot of competitions are open only to European companies or if an American company is bidding they must have some kind of European company participation (called an offset). I am working a job that has a contract with a European Government and there is a 40% offset requirement meaning, my company has to spend 40% of the total value of the contract with companies in Europe. We don’t require that here in America, in fact the only “Buy America” provision passed by congress is for Fasteners (screws, nuts, bolts and rivets) and Electrical connectors. Oh, and by the way, Allies of the U.S. are exempt from this requirement so only U.S. manufactures such as Boeing have to buy American made fasteners and connectors while Airbus can populate their aircraft with parts made in China. Nothing like shooting ourselves in the foot but that’s what we get with our Congress.

There is a movement afoot to force the USAF to take into consideration the WTO rulings on the EADS/Airbus offering (that story here) but my guess is that this will be challenged and further delay the awarding of this contract. All the while the USAF racks up huge costs in flying this very old aircraft. In 2002 the cost of maintenance per flight hour was $11,000 per hour on this aircraft and with a 6.2% increase per year for that you can only imagine what it costs today to fly and operate this aircraft. So any delay in replacing this aircraft is a huge cost to the USAF. (Numbers come from this report.)

It’s time for the US to adopt a Buy American provision that covers something like this even if it means there is only one bidder. It is time for the FTC to stop these big defense companies from buy each other out, which is why we are down to the one company that builds large fuselage sized aircraft in this country from 4 or 5 we had back 20 years ago.

Anyway, folks, that it for this version of the Tanker Wars update. A little long but there is a lot here.

BT: Jimmy T sends.

Tanker Wars -

Cool Picture Credit: From EADS North America Website.

The dirt is really flying in the Air Force next generation Tanker competition or KC-X. The plan is to procure 179 modern airframes from which to pass fuel to military aircraft, easier said than done.

Not the physical art of In-Flight refueling, I am talking about that rare science that is the US Military procurement process.

With EADS/Airbus firmly now in the competition the pressure on Boeing to meet all the stated requirements (which are now Pass/Fail as opposed to weighted evaluation) and at a cost that beats the larger EADS proposed aircraft the A330 (KC-45).

Rumor on the street is that EADS/Airbus will bid this program like Lockheed Martin does, Low Ball.

An analysis by the Gehrson Lehman Group explores this rumor and theory. EADS/Airbus has everything to gain by low balling this procurement. By buying in low they deprive a revenue source to their only rival in the military large airframe business. And this would be a long term revenue source if the age of the existing Refueling fleet is any indication.

And remember EADS/Airbus operates basically as a Non-For-Profit corporation and relies heavily on the partner governments for subsidies to launch new airframes, build infrastructure (such as assembly lines, hangers and expand runways at airports for Airbus operations) to balance its books.

Head to head Boeing would easily win and many analysis's agree with this, but don't bet on an even playing ground for this bid.

Consider also the most basic cost driver here, the cost of the basic airframe. In this estimate (by the Lexington Institute) there is a $50 million dollar difference between the Boeing B767 and the Airbus A330. This is more than $9 Billion dollars over the total of 179 planned aircraft buy. How could they possibly consider a loss of this kind? Well, being bailed out by the governments of the consortium that constitutes the Airbus Company is nothing new. It is getting old however.

Simply look at the Airbus military cargo aircraft that has just now started flight testing, the A400M. Building the prototype used up the initial contributions and down payment money from the European countries that have agreed to buy this aircraft (it is bigger than the C-130 but smaller than a C-17). The result, Airbus has requested and received additional monies to continue the program.

But it gets worse: The Pentagon Revolving Door rotates to the EADS/Airbus exit and who got spit out? Retired General Arthur Lichte, former commander of the Air Forces Air Mobility Command. Taking yet another page out of the Lockheed Martin business plan EADS/Airbus has hired someone that can go in and massage those who would be making the decision on which airframe to buy in this competition. But that famous Revolving Door works both ways and Boeing has many a former General in its employ as well. In fact they employ a former AMC Commander also however, this one left the service back in 2001, not LAST YEAR as General Lichte has.

It's all good folks, let's just hope the Country as a whole does not get screwed in this most ugly process.

BT: Jimmy T sends.

Tanker Wars – Back On!

Ok it seems there could be a storm brewing on the KC-X horizon. When we last discussed the Tanker program it was to announce the end of the Wars between NGS and Boeing since NGS was not going to submit a bid.

Oh what a couple of weeks makes: now word is out that EADS/Airbus the former partner with NGS on the Tanker program will now attempt to bid with another American company fronting for them here in the USA. No one knows who that other company is but it won't matter. However there is one report that they may in fact go it alone. They have asked the DOD/USAF for additional time to prepare their "new" proposal. And the DOD/USAF is more than happy to give them that time. You know, in the name of "fairness" and competition. More of the story here .

Also, there was news that a Russian firm wants to throw a bid into the mix as well. United Aircraft of Moscow wants to off the USAF a modified Illyushion IL-96. The modifications include replacing the 4-tubro jet engines with new modern turbo fan engines and with a fuselage a little wider and longer than the existing KC-135 aircraft. They now claim that they are not bidding on the contract so we will have to wait and see what really shakes out of this one.

Could it get any better than this for us pundants? And I thought it was all over!

Boeing is holding it tongue right now, what was supposed to be a cake walk suddenly now has some IED's implanted throughout their AOR and there is still a movement out there to build two different Tankers.

BT: Jimmy T sends.

Tanker Wars Fizzle

Northrop Grumman (NGS) has decided to bow out of the Air Forces next generation aerial tanker competition much to the dismay of EADS/Airbus. NGS claims the competition is hard wired for a smaller size aircraft than what they wanted to propose.

"After a comprehensive analysis of the final RFP, Northrop Grumman has determined that it will not submit a bid to the Department of Defense for the KC-X Program. We reached this conclusion based on the structure of the source selection methodology defined in the RFP, which clearly favors Boeing's smaller refueling tanker and does not provide adequate value recognition of the added capability of a larger tanker,"

So off they go, and I am sure Boeing is dancing in the streets around Paine Field in Everett Washington. And the Defense Department, they claim to be "disappointed" that NGS/EADS/Airbus will not be participating. But you know as well as I do that they are breathing easier right now because the pressure to "do the right thing" whatever that might be is off them. I mean, anyone can evaluate and award a contract with only a single bidder.

I just hope Boeing does not go off and pull a Lockheed-Martin bait and switch operation and jack up the price and/or "work" the program into a money hole al la F-22/F-35. We will have to wait to see what happens now.

BT: Jimmy T sends.

KC-X is ON

It's ON.

The great race for the next Air Force Arial Tanker Replacement Aircraft or KC-X is ON. The Final version of the RFP hit the street on Wednesday this last week and both competitors are busily pulping trees for the paper they will need for their submissions. The DOD claims they made hundreds of changes to appease the two suspected offers. Time will tell.

Both parties are claimed to be upset. The Northrop Grumman/EADS/Airbus complained earlier that the Draft RFP leaned towards a replacement of the KC-135 airframe which they feel reflects more the Boeing product not theirs. They had threatened to throw a temper tantrum and go off sulking on some corner sucking on their thumps. Collectively.

Meanwhile Boeing was laying down the crocodile tears and still moaning about the fact no one dared address the illegal subsidy issue that Airbus is guilty of. As determined by the WTO Airbus received 5 Billion dollars of illegal support from partner countries.

By all rights this should have been addressed in some kind of penalty on Airbus but the DOD/Air Force did not make any changes to accommodate the WTO finding. Maybe they think Boeing is guilty of the same thing however the business model and the funding sources for the 767 airframe (and most if not all of the Boeing commercial products) is not from the US Government or any government for that matter. That source is what is known as "venture capital" and is usually made up of private sources.

If you want to see how the European sausage is made simply look at how much over the barrel Airbus has their government partners on the A400M Transport aircraft. When they miscalculate or have problems and they run out of money they simply go back to the partner governments and get more money. No risk and all the reward. The WTO ruled that the A330 aircraft contains 5 billion dollars of extra aid that makes it less expensive than its competition.

So, standby to standby I will be watching if the NGS/EADS/Airbus actually puts in a proposal.

BT: Jimmy T sends.

Airbus/KC-45 (right face) stolen from:

Boeing KC-767 (left face) stolen from:

Tanker Wars - Update

I am just throwing out some generic news about the upcoming "Spring Offensive" in the Tanker Wars. Currently the Air Force is planning on releasing their RFP sometime next week. They did address some issues in the RFP from the Draft version that the bidders were all complaining about, some more than others.

So far this is what we have:

The NGS/EADS/Airbus Team is still crying about "competition" warning the Air Force that it may not bid because it feels the Draft version of the RFP is tilted towards its major competitor in this arena – Boeing. Their complaints are legion and the Air Force to its credit did go through the motions of listening to NGS/EADS/Airbus but we won't know how much affect this will have on the actual RFP until it is released. Northrop is keen on the competition complaint (where else have we heard that, oh yeah the Royalty in our House and Senate whining for a public option in Health Care) that I think they have hooked their whole wagon to this rube, here is a quote from NGS Spokesman Randy Belote

"the current draft RFP, as structured, fails the test of true competition and, without meaningful changes, is not an RFP to which Northrop Grumman can respond."

So let's see just how far the Air Force goes in modifying the draft, that should be this coming week.

As far as Boeing is concerned their pretty much ok with the draft and I think their only complaint was about the Fixed-Price portion of the effort. This to me is understandable because on any new aircraft program there are issues that you cannot predict and bidding that as a Fixed-Price is assuming a lot of risk. Boeing should be able to master this however given they already have a version of their Tanker, the KC-767 flying and operating for both Japan and Italy. But still, the Air Force will want its own "stink" on this aircraft and the contractor will have to apply that and that is where the risk is at.

Programmatically the biggest worry Boeing had was the idea of"Split" tanker procurement. This is where the Air Force buys aircraft from both contractors. This is of course beyond dumb, it borders insanity but it is a favor to some. The biggest proponent of this approach was disgraced Congressman John Murtha and he had the good fortune of dying. Murtha was the chairman of the House Armed Services Committee and he welded a lot of power in that role, and was involved in a lot of shady dealings in that role. I won't go into the Hidetha Marines incident and his comments on that, which is why I called him "disgraced". But that is another story.

At any rate, with Murtha pushing up daisy's the idea of a "Split" procurement pretty much goes down into the hole with him, Senator Shelby aside. His replacement as Chair on the HASC is generally recognized as a Boeing supporter.

Here is an article regarding the fact that the Air Force is prepared for a single bidder, is this the Boy's in Blue reading the tea leaves? One wonders. Well we don't have long to wait.

BT: Jimmy T sends.

Tanker Wars – Part VIII

Words out that the Air Force is making minor changes to the RFP that will be released any day not for the massive Air Refueling Tanker buy. Not everyone is happy. Seems that the Fixed Price portion of the contract includes too much risk for NGS/EADS. And I thought they were bidding on a pretty much Off-The-Shelf product, hardly any development required to meet the Air Force requirements. Same as Boeing, if the cockpit is the only place that needs to be tinkered with to meet Air Force needs then why all the complaining. Not sure, but they may be looking for their excuse not to bid. They have been complaining all along that this new RFP looks like a replacement for the KC-135 and not a "new" aircraft. Huh? Is that not what they are doing?

And here I open my Aviation Week magazine (yes, I still get the paper version) and see this Ad:

NGS wants to make this thing about "competition", jobs for the "American" workforce, yet they never once mention that they are teamed with EADS for this procurement. Funny huh, I thought so too. And when you dig into contract awards it seems that the French Bias within the EADS consortium makes including them and "competition" in the same breath a real laugher. There is a one-way road here folks, the US Government is required to compete without regards to national origin and has frequently given good work away to not only EADS but other European companies (the very large Army contract for utility helicopters is an example of the former and look at all the French and Spanish equipment the Coast Guard flies as an example of the latter) yet you do not see such contracts the other way.

NGS long ago gave up its capabilities as a Large Air Frame manufacturer ceding this business to Lockheed and Boeing. Now they want back into the business and are willing to partner with the "French Devil" to get their share of the 35 Billion dollars that will come if they prevail. In the end, will NGS be back in that business, NO.

I would normally push the build it here in America by Boeing but I know a large part of the 767 is built outside of the US and is simply completed here in the US. This is not unlike what NGS and EADS have in mind with their KC-45/Airbus A330 airframe conversion.

But there is something to be said of a company on its own dime develops an airframe from scratch, sells it on the Free Market without help from government owned Airlines with no "Launch Aid" money and makes a success out of that airframe. The majority of the benefit of a Boeing award would be here in the U.S. not in Europe and that is enough for me.

BT: Jimmy T sends.

Tanker Wars – Part VII

Hey, this might work. Velma Jackson asked the Mobile City Council to start a weekly prayer meeting in order to entice the Tanker God's to award the upcoming USAF Tanker contract to the team of Northrop Grumman and EADS-Airbus. Mobile City is the proposed site for the assembly of Airbus A330F aircraft that the NGS/EADS team will be bidding to the USAF. The region stands to get lots of Job's if the contract were won by NGS/EADS, along the order of thousands or so they say. There will be jobs to be sure but I don't see the numbers they are claiming as it defies logic that Airbus will transfer this assembly line to the US killing jobs in the various countries in Europe that build it now. I mean, they get direct grants of money by their partner governments that fund the building of these aircraft for precisely that reason, the Jobs. The reality is that the aircraft will be fully assembled in France and then flown to this new facility where all the military equipment and the actual Tanker package will be installed.

Meanwhile, in other news the government of India has announced it will not be buying any of the Airbus A330/KC-30 Tanker aircraft for its Air Force. This leaves Airbus with only the launch customer of Australia (4 aircraft), the UAE (3 aircraft), Saudi Arabia (3 aircraft) and the UK (14 aircraft) that they will be building aircraft for unless they prevail in the USAF contract.

Also for your digestion, the USAF announced that the Final version of the Tanker Replacement RFP will be released soon either at the end of this month (January) or in early February, and they are making changes from what was in the Draft. Both potential bidders for this large contract were enumerate with the draft RFP although the changes being made are described as minor in nature so it is not known how the NGS/EADS-Airbus Team will stay in the bidding process. We have to wait till the Final RFP is out and they have a chance to review it.

Still more fun than you can shake a flying boom at!!

BT: Jimmy T sends

Tanker Wars – Part VII

More Tanker action, these guys are getting more action than Abrams in the AF!!

First we have statements from the DOD stating that changes to the Air Force Draft RFP are not out of the question and could be done in preparation of the final version. This assuages the NGS/EADS-Airbus team as they are hopeful for changes to make the competition more "fair", to them of course. A DOD representative, speaking on condition of anonymity because he was not authorized to be leaking this info in the first place, claimed that DOD "will make changes as is appropriate". Double speak for "in a pig's eye" we will be making changes. They also claimed that a split tanker buy was not being contemplated, meaning that no one is considering buying a few tankers from both manufacturers.

Now this: Split Tanker Buy gains momentum. Yeah, as fast as paint dry's we have this report about the growing support for a split purchase. Congressional support for this option is gaining support because well simply put it buys the most votes! You see when you are a member of Congress and you see this $179 Billion dollars you simply want to buy the most votes you can so, the best way to do that is to spread those bucks around. Left up to Congress that is what would happen. God save us.

And finally we have another group of U.S. Lawmakers that want NGS/EADS-Airbus banned from the competition altogether. The reason, the favorable ruling from the World Trade Organization that ruled Airbus has taken illegal subsides from their partner governments giving Airbus a competitive advantage over their rivals. The Air Force has steadfastly held that they will not factor into their deliberations the WTO ruling despite repeated complaints from Boeing that the base cost of the A330 airframe was under value because of these illegal subsides.

It don't get better than this, we should let the two companies fight it out the old fashion way, fist to cuff's! Winner takes all!

More to come I am sure.

BT: Jimmy T sends.

Tanker Wars – Part VI

More, more, more – I love it!!

More whining by NGS regarding the terms and conditions in the draft RFP. Their complaint now is that the Air Force wants it to be a Fixed Price contract. On the one hand I don't blame them; a Fixed Price contract puts all the budget risk on the contractor, on the other it is what is best for the Taxpayer. They have threatened (or renewed their threats) to No-Bid this competition in hopes that Congressmen sympathetic to their cause.

MoreTanker updates.

Since the Air Force is insisting on this being a Fixed Price they are simply asking for "Off the Shelf" or COTS of some kind. In most cases you take it as you see it and go; no added extras, no requirements creep and no fancy bells and whistles from what is offered. That is something hard for the Government to pass on. Our military likes its bells and whistles not the ones that Australia or Italy or Japan have installed (these are customers of the KC-30 for Airbus and two of the customers for the KC-767) so the government sets itself up for cost overruns if it can't keep its hands and feet out of the cookie jar. If they can live with what is offered, absolutely no changes to what is offered, then it is a win for the Taxpayer.

More Air Force obtuseness:

Start-up the NGS/EADS-Airbus Bitching/Moaning/Crying Machine! This little bit about how the Air Force will not (NOT) be making any substantial changes to the Draft RFP in their work up to the release of the Final RFP which is expected in January. So, all them complaints about the Draft looking like procurement for a smaller aircraft will be in the Final. Expect more crying from NGS.

Boeing thinks it can now pass the minimum fuel transfer rate through their Boom. The Boom they are bidding is being used on the KC-767 being delivered to Japan, it would only transfer 900 pounds per minute but the Air Force is demanding 1200 pounds per minute. This greater capacity is required to refuel the C-5 Galaxy aircraft which holds something like 50,000 gallons when its thirsty. So getting the gas into the C-5 is the metric and Boeing was struggling but they claim to have a fix and that their "new" flow rate meets or exceeds this so, good on them. Any more from Boeing, oh yeah.

Boeing had a meeting with Air Force officials to formally complain about the evaluation factors in the Draft RFP which they feel is "unfair". They especially are questioning the fact that there is no benefit for or value attributed to the aircraft with the better fuel-burn-to-fuel-transfer-rate which the smaller KC-767 would presumably have. Maybe it was something that the DOD left out of the RFP re-write but the only ones that really seem upset is the NGS/Airbus team. I think Boeing needed to go through the process of meeting with the Air Force and of course having something to complain about, you know keep up those appearances. Can't have this thing look likes it's in the bag for them.

EADS-Airbus can at least feel good about taking $247 million US taxpayer dollars back across the Atlantic with their win of their second LUH contract with the US Army. They are going to be building 45 more UH-72A Light helicopters for delivery in 2010. The Lakota aircraft are built in Columbus Mississippi and are used by the Army and the National Guard domestically for training, troop transport and medic-vac missions that UH-60 Blackhawks would otherwise be doing. The Lakota's free up the Blackhawks for use in the more unfriendly places of the world. This 45 aircraft order brings to 178 total UH-72's that have been ordered by the US Army of an expected 345 so EADS-Airbus is doing good here in the US. They also sold 6 of these aircraft to the US Navy Test Pilot school and expect to bid on the Army's Armed Scout helicopter competition using this same basic airframe, adding some sharp teeth to an otherwise good looking airframe.

Where-Oh-Where will all this take us, I don't know but I love the blog fodder it generates!!

BT: Jimmy T sends.

Thanks to: Alert 5 and the Boeing Tanker Blog