Posts Tagged 'KCX Tanker Program'

I’d like to be in America

Despite last week’s news that EADS was withdrawing their Airbus KC-30 aircraft from the US Air Force’s KCX future tanker competition, the company remains in a bullish mood regarding its military prospects in the United States. Domingo Urena, boss of Airbus Military which produces the company’s tankers, told the press on Monday 15th March that the firm could sell up to 500 Airbus A400M turboprop airlifters; 210 of which could be sold to US military customers.

Breathless optimism? Perhaps. The troubles of the A400M, which has now begun flight testing at Airbus’s manufacturing centre at Blagnac Airport in Toulouse, France, are well documented. Talk of customers beyond the airlifters’ partner nations (Germany, France, Spain, the United Kingdom, Turkey and Belgium) may seem a tad premature, particularly given South Africa’s cancellation last year of the eight aircraft it had originally intended to buy.

That said, the A400M could fill a niche for countries wanting a large airlifter but lacking the circa US$200 million cash for a Boeing C-17 Globemaster freighter. While the A400M has a Maximum Take-Off Weight (MTOW) of 141,000 kg (310,852 lb) compared to the 265,352 kg (585,001 lbs) MTOW of the C-17, the Airbus’s unit cost is predicted to be in the region of US$80 million. Although to paraphrase the financial world’s favourite disclaimer, ‘values can go up as well as down’.

Another factor may also play in Airbus’s favour. Boeing’s C-17 production line in Long Beach California is slated to close in around 2012, according to a February report in the Los Angeles Times; exactly the time when Airbus hopes to be looking towards full-scale production of the A400M. However, additional C-17 orders may extend the life of the plant, although by how much is unknown.

Should C-17 production end by 2014/15 at the latest, the A400M could become the only game in town as far as large airlifters are concerned. True, Russian and Ukrainian suppliers offer huge Antonov An-124 freighters, but these are a generation behind the A400M in terms of technological sophistication. Moreover, production of new An-124s is sporadic.

The demise of the C-17 could mean that the US Air Force has little choice but to look at the A400M as a candidate aircraft if, in the future, it finds a requirement for a larger airlifter than its existing Lockheed Martin C-130 Hercules, to supplement its C-17 fleet. Mr. Urena’s comments show EADS’s self-imposed exile from the KCX competition may not preclude the firm from selling Airbus’s other military flagship product to the Pentagon in the future. We live in interesting times!

By Thomas Whithington

EADS Withdraws from United States Air Force KCX Tanker Competition

The news that EADS has decided to withdraw from the United States Air Force‘s ‘KCX’ replacement inflight refueler competition seems to underline the closed nature of the American defence market vis-a-vis European suppliers, particularly of ‘big ticket’ contracts such as these.

In some ways, the whole programme distills the trans-Atlantic spat between the European Union and the United States over the issues of subsidies for aircraft production. The World Trade Organisation has been hearing a dispute between the two aircraft builders regarding the subsidies Airbus receives from European governments to develop new airliners and, last September, issued an interim ruling in favour of Boeing. However, a countersuit is proceeding through the WTO alleging that Boeing recevies unfair subsidies from at the state level from Washington and Illinois.

The support that the Democrat Party receives in Washington State, where Boeing’s KC-767 production line is located arguably means that, with a Democrat President, EADS and Airbus were always going to have a hard sell with their KC-30 design. This whole issue of pork barrel politics is amplified by the fact that buying the 767 would retain around 2,700 jobs at Boeing’s 767 production line, whereas establishing a KC-30 line in Mobile, Alabama (where the KC-30 was intended to be assembled) would have created around 300.

In these times of economic belt-tightening, President Obama could be forgiven for not wanting to threaten the workers at Seattle who would face redundancy when the 767 production line is scheduled to close in the next few years, should the KC-767 not be selected.

However, one of the ignored questions surroudning the KCX competition is what will happen to the KC-30 design, now that it has been withdrawn from the US Air Force competition? This aircraft has been selected by France, the United Kingdom, Saudi Arabia, the United Arab Emirates and Australia as these countries’ respective new in-flight refuelers. With the KCX competition ‘in the bag’ just where are the future orders for the KC-30?

Airbus might be able to grab the odd purchase of five-to-ten tankers here and there from countries around the world, such as Brazil, which need that capability, but the biggest order has eluded them. Moreover, the fact that the US Air Force operates a particular aircraft is a fantastic selling point, and will likely win Boeing KC-767 orders from nations wanting to fly a similar type of aircraft, particularly those countries closely allied to the United States such as Turkey. With the A400M‘s test flight schedule still far from complete, and the KC-30 thrown out of the KCX competition, what is the future for Airbus’s military aircraft business?

By Thomas Withington


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