Filed under: Boeing, Congress, KC-X, KC-X Tanker News, Syndicated Industry News, Washington
At a recent conference the Air Force Secretary, Mr. Michael Donley, discussed the key programs for the Air Force’s future. Facing a declining budget situation the Air Force as all of the services may be forced to choose which investments have a higher priorities then others. Not surprisingly the keys for the Air Force will be the F-35, Unmanned Aerial Vehicles (UAV), space and the KC-46A tanker.
The KC-46A currently being developed by Boeing (BA) will go into service later this decade to replace the aging KC-135 fleet. In terms of total cost it is one of the largest current defense programs. If the Air Force follows through with the first 170 odd aircraft the cost will be about $35 billion. There are plans to buy another 300 or more.
If there are as significant reductions to the defense budget as being discussed then the KC-46A like so many other programs may see quantities cut. This could be either the total procured or the annual buys. It could also see it being maintained at the expense of other investment programs such as new UAV or space programs.
Tankers are a key force multiplier for the United States. Declining amounts of strike assets increase the reliance on the tanker fleet. The need for the KC-46A is well established and it is a program now that the commitment to Boeing has been made that the U.S. really cannot afford to reduce. Whether this holds true remains to be seen.
Filed under: Alabama, Boeing, Congress, EADS, Kansas, KC-X, KC-X Tanker News, Syndicated Industry News, Washington
Despite the current issues with defense funding the Defense Department and Air Force reportedly said that they hope to award the KC-X aerial tanker contract within a month. The budget sent forward for 2012 on Monday stated that the planned contract was valued at around $35 billion.
It sounds like that even with the Pentagon acting under a continuing resolution rather then an official budget that at least the winner will be announced. There is some concern that without a 2011 budget resolution from Congress a new contract of this magnitude might not be able to be awarded. This means that the Air Force will have to wait until October 2011 to have initial funding for the purchase of the new tanker.
The KC-X saga is heavy with political overtones as supporters of both Boeing (BA) and EADS (EADS:P) in Congress continue to lobby OSD and threaten problems if their preferred source is not chosen.
The Air Force has been trying since early in this decade to buy a new tanker and this award may be the last step towards doing that. Although the chances of a protest by the loser remain high and the current budget situation between President Obama and Congress may make it difficult to get the funding resolved anytime soon.