Tanker talk filled with uncertainty

Two years ago, its was a “foregone conclusion” that the U.S. Air Force would buy KC-767 tankers from the Boeing Co., defense analyst Loren Thompson said.

But today? “I don’t know,” said Thompson, who follows defense issues for the Lexington Institute, a Washington, D.C., think tank. “At this point, the tanker competition is so confused.”

Thompson and I spoke after Boeing last week filed an annual report with the Securities and Exchange Commission that warned investors that prospects of it getting an Air Force tanker deal before Boeing runs out of 767s to build for airlines “had diminished.”

The end could be near for the 767, Boeing said, and the decision to pull the plug could come before the end of the year.

The tanker deal is a twisted tale of greed, bungled politics, back-room deals – and oh, by the way, very real jobs at Boeing’s Everett factory, where it once seemed certain a new generation of military refueling tankers would be built.

But almost lost in the wrangling is any discussion of the key points: The U.S. Air Force is flying KC-135 tankers that date back to the Eisenhower administration, and they need to be replaced. The only questions are how soon, and with what.

There’s an honest debate over the second question.

Thompson said he has talked with key players at the Air Force and at Boeing, and with the EADS/Northrop Grumman team that’s proposing an American-built Airbus A330 tanker.

Thompson said that in spite of last week’s warning, Boeing is still committed to the 767 tanker. Pundits have talked about a tanker based on the 777, but the Air Force has not formally asked Boeing to develop one, so Boeing hasn’t done much work on a design.

“The 777 was not the optimum airframe for aerial refueling,” Thompson said.

He’s not an aviation expert, he said, but the basic problem seems to be the 777 is too big.

However, there’s a faction inside the Air Force that thinks the 767 is too small, Thompson said. That group favors the A330-based tanker.

The issue is the Pacific theater, he said. “The distances over the Pacific are so much greater than in the Middle East or North Atlantic.”

The A330 is bigger than the 767, so it can carry more fuel. And while the 767 is more fuel-efficient on some missions, “over a wide range of distances, the A330 delivers more fuel,” Thompson said.

Given that, in some corners of the Pentagon, buying the A330 seems more attractive, he said. “I’m not saying that’s what will happen, but that’s a scenario I can imagine.”

The tanker issue also is complicated by the fact that the Air Force also needs to make a decision on buying more C-17 cargo jets. Like the 767, production of Boeing’s C-17 also is winding down.

The Air Force “certainly needs more C-17s,” he said, and the cargo jet has the backing of California’s powerful congressional delegation. But spending on the C-17 could undercut the tanker program.

Congressional politics will play a huge role in the final tanker decision, Thompson said. The House of Representatives seems likely to oppose buying a foreign jet for the Air Force, but the Senate is likely to be more neutral.

But in the end, “the whole competition ultimately comes down to which plane the Air Force wants more,” he said, and for now that’s too close to call.

One thing’s for certain, Thompson said: The tanker deal is a tangled mess.

“For God’s sake,” he said, “all we’re doing is buying some modified commercial aircraft, and we’ve turned it into the Manhattan Project.”

For more aerospace news and analysis, see Bryan Corliss’ Web log at www.heraldnet.com/ blogaerospace.