New Markets Seen for Air Refueling Tanker Programs

Bidding for the UK MoD's Future Strategic Tanker Aircraft (FSTA) program, for 20-plus replacements for 20 current RAF air refueling BAe VC-10s and nine Lockheed TriStars, will narrow to only two competing consortia, from expected Paris air show disclosures.

In December the MoD confirmed four industry consortia bid invitations for the FSTA contract, now worth about $18 billion, to provide UK air-to-air refueling (AAR) services over 30 years from 2007-09.

FSTA is MoD's largest potential Private Finance Initiative (PFI) deal to date, involving contractor aircraft ownership, management and maintenance, plus training facilities and some personnel. Short-listed consortia bidders were invited to provide fully-costed submissions, from six 1999 outline proposals. The four comprised Air Reach, led by Rolls-Royce; BAE Systems; Eurotanker, including FR Aviation and Thales; and Serco's Strategic Support Management (SSM) group, incorporating Serco Defense Support and Spectrum Capital.

In mid-January, however, Air Reach and Eurotanker joined forces with other major European companies, to form the AirTanker group. This now includes the European Aeronautic, Defense and Space Company (EADS), Rolls-Royce, Cobham's FR Aviation, Brown & Root Services, and Thales Defense. AirTanker is committed to "the latest generation wide-bodied Airbus (A330) with Rolls-Royce Trent turbofans" for its FSTA proposals.

Negotiations between BAE Systems and Boeing are expected to result in confirmation in Paris of a joint FSTA proposal, further combining partnership with the Serco-led SSM group. This would be based on using current British Airways Boeing 767-300s, and is linked with Boeing's March establishment of a B767 Tanker Programs Office within its Military Aerospace Sector, for air-refueling applications.

Bidders' proposals will allow the MoD to decide whether PFI can provide the RAF's with a cost-effective air refueling operational capability. Problems may include arranging worthwhile commercial transport contracts while maintaining minimum force availability for priority military roles. An FSTA PFI program go-ahead decision is planned in mid-2002.

PFI is also seen as a future option for the U.S. air forces, which operate by far the biggest AAR fleets in the world. Some 546 USAF Boeing KC-135E/R/T and 59 Boeing/MDC KC-10A strategic tanker/transports are supplemented by 57 special-mission tactical Lockheed MC-130P Combat Shadows, plus the first HC-130Js. The U.S. Navy and Marine Corps operate 80 or more KC-130F/R/T/T-30 Hercules tankers, plus the first few of 51 required KC-130Js. The KC-135s are undergoing progressive major structural, powerplant, digital avionics and equipment upgrades. Among the latter are 33 FR500 underwing hose-reel pod sets, also being fitted to 20 KC-10s, for both types to refuel U.S. Navy and allied probe-equipped aircraft. Some KC-10s also incorporate fuselage-mounted FR600 hose-reel units, for similar roles.

These upgrades will extend USAF KC-135/KC-10 service lives to between 2013-2040. Evaluations have already started, however, of possible replacements, through the Defense Department's new KC-X Tanker Requirement Study for 2005 (TRS-05). Following retirement of its Grumman KA-6D and Lockheed KS-3A tankers, the U.S. Navy is exploring PFI operations through a recent $6.6 million air refueling contract with Flight International, Inc. and Omega Air. This involves 600 hours of tanker, EW training and other U.S. Navy support missions by Omega's dual probe-and-drogue equipped Boeing 707-320 through October this year, with renewal options up to 2005. These, and the USAF's massive KC-X requirement, are also hungrily earmarked for early pursuit by the FTSA contenders, who have also briefed 10 or more other countries on their proposals.