Despite AirTanker's victory in the UK's tanker contest, the consortium faces a number of challenges in making the deal work
AirTanker's success last week in beating off the consortium led by rival Boeing for the UK's Future Strategic Tanker Aircraft (FSTA) requirement ended what has been a particularly grim 12 months or so for the US company, which witnessed the departure amid a mire of an ethics scandal of its two most senior executives and its first defeat in commercial aircraft deliveries by Airbus. Now its dominance of the lucrative global tanker market is under threat.
Air force leaders on both sides of the Atlantic have identified the availability of inflight refuelling aircraft as the main limiting factor during recent air campaigns over Afghanistan and Iraq. For the UK, these conflicts highlighted an urgent need to replace ageing aircraft with modern jets offering extended range, greater time on station and the avionics required to ensure safe operations in congested skies.
The country appears to have found its mate in the A330-200, but debate continues on whether a fleet of around 16 aircraft will deliver enough hoses in the sky to tackle such intensive campaigns.
Celebrations in the EADS-led AirTanker camp have been quieter than anticipated, since the Ministry of Defence fell short of announcing a firm decision to proceed with the deal as a private finance initiative (PFI) scheme. Key questions have yet to answered, and negotiations could again delay a contract award already more than two years behind plan. Unless discussions are completed in April, the FSTA capability could suffer by more than the one-year delay already accepted by the MoD.
The advent of smart acquisition has done little to reduce programme delays, but has led to the MoD being wary of embarking on projects with excessive risk levels. A still better balance must be reached if the armed forces are to receive the vital equipment they need on time.
Arecent UK National Audit Office report criticised the MoD for allocating too little money to risk reduction. With just £23 million ($42 million)to be spent in assessing the £13 billion FSTA deal, much of this responsibility will rest with industry. This has alarming parallels with the fixed-price deals awarded before the introduction of smart acquisition, and raises the spectre of future project difficulties. AirTanker chief executive Robin Southwell months ago warned that a wrong decision on FSTA could leave the UK "with another Nimrod on its hands". Let's hope this doesn't come back to haunt AirTanker and the RAF.
The MoD was always going to struggle to trust Tanker and Transport Services Company (TTSC) member BAE Systems because its poor past performance on contracts such as the Nimrod MRA4 maritime patrol aircraft and Astute attack submarine which have cost the parties more than £1 billion in excess charges. Equally as important, is that BAE, which is unwilling to expose itself to the risks accepted on earlier projects, also struggled to trust itself.
BAE's checkered programme history and team-mate Boeing's current KC-767 uncertainty did not tip the scales in AirTanker's favour, but they cannot have helped their combined prospects. In addition, for all TTSC's talk of commonality with the USAir Force's planned fleet of 100 KC-767s, the platforms would have had different engines, refuelling systems and fuel loads. While the post-mortem results have yet to be released, BAE acknowledges that its industry team also lost on price.
The A330-200 will deliver commonality with the tanker-capable Airbus Military A400M for up to 40 years, if an AirTanker proposal is accepted. But will the FSTA fleet - and especially any secondhand aircraft - be able to deliver this longevity in RAF and commercial service? This remains a vital aspect of the deal if a PFI agreement is to be made.
EADS and Airbus should use the UK victory to launch a reorganisation of their confused military transport aircraft activities, where Germany, Spain and now the UK all have claims to be the European centre of excellence for tanker systems. But as with so many European initiatives, who will take the lead?
So well done AirTanker. Given a successful conclusion, the UK deal will leave the door ajar for A330-based proposals in Australia, France and beyond. But what of Europe's prospects in delivering tankers to the USAF? Boeing may have tasted a rare defeat in the UK contest, but the US manufacturer is almost certain to have its home market sewn up for many more years to come.
Source: Flight International