Air Force is pressed to test air refueling — for hire

Sounding an alarm over the Air Force’s ability to perform all necessary air refueling for military operations and training, Senate defense authorizers are pressing service leaders to launch a program to test the use of commercial companies for aircraft refueling.

The move could create a unique niche, albeit small, in air refueling for companies other than traditional aerospace giants such as Boeing, Northrop Grumman and Airbus.

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Companies including Omega Air, Atlas Air and Evergreen International Aviation have expressed interest in providing the service for the Air Force and helping to fill a widening gap at low cost, according to several industry and congressional sources.

The Air Force, which is tasked to refuel a large number of the military services aircraft, is dealing with an aging and declining fleet of mid-air refueling tankers.

Replacing its tanker fleet is the Air Force’s No. 1 priority, but the service — after having dealt with a contracting scandal for new tankers several years ago — is not scheduled to begin receiving its next-generation tankers until 2011, while it is planning to retire some of its older tankers.

The average age of the Air Force’s workhorse, the KC-135, is more than 45 years old. Air Force leadership, including the Air Force’s chief of staff, Gen. Michael Moseley, has expressed concern this year about the Air Force’s readiness levels and has pushed to preserve funding requests for some of its most-coveted programs, including the tanker.

In the committee report of the Senate Armed Services panel’s version of the 2008 defense authorization bill, authorizers sounded concern about the Air Force’s ability to meet all air refueling requirements in the immediate future.

“At a time of historically low readiness levels, the Air Force cannot afford further degradation in air refueling capacity,” the committee report stated. “The committee is aware of several commercial providers of fee-for-service air refueling.”

For the first time this year, the Senate committee has issued strong directive language to press the secretary of the Air Force to initiate a competitive pilot program to test so-called “fee-for-service air refueling.”

Fee-for-service contracts rely on a company’s own assets and personnel. The service would pay a private company to deliver tanking services by the hour. The company is paid for a certain number of service hours per year.

The commercial option could save the Air Fore up to 50 percent compared to “the current methods of organic air-refueling operations,” according to the Senate committee report. Another argument in favor for the fee-for-service concept is that the Air Force could retire its aging aircraft at a faster rate while new tankers are being delivered.

The concept of commercial air refueling is not new. Air Force officials in the past indicated a desire to investigate the use of hired air refueling as part of the service’s new tanker, known as KC-X, acquisition strategy.

When the Air Force issued a request for information for the KC-X last year, it referred to the fee-for-service air refueling as “Part B” of its acquisition strategy. However, when the Air Force issued the actual request for proposals to industry it did not include Part B.  

By all accounts, the service kept mum on its intentions to explore the option of using commercial companies when it cannot provide its own air refueling assets.

“The Air Force said that they are pursuing Part B, but there is no evidence of it,” said Christopher Bolkcom, a national defense specialist with the Congressional Research Service who has followed the issue. “The principal challenge for the Air Force is to find room in its budget for 600 new airplanes, which is already crowded by other modernization needs.”

The Air Force has faced some internal resistance to the idea of using commercial companies for air refueling. Among the concerns raised were that air refueling is a wartime operation that should be conducted by the Air Force, as well as the fact that any other alternative for refueling could take away from the service’s own new tanker fleet. The Air Force’s efforts to recapitalize its tanker fleet have been fraught with controversy.

The Senate’s language aims to channel some focus onto the fee-for-service concept. The panel also directs the secretary of the Air Force to seek Part B proposals to determine the “practicality of relying on fee-for-service air refueling services for satisfying some portion of the Air Force refueling mission,” according to report language.

The pilot program will be a precursor to Part B and help inform the debate, according to a congressional source. The source said the goal is to launch the pilot program by the end of the summer, using research and development money.

The program had been in the making for a while, but has been delayed by several months. Congress now is turning up the heat.

Even though the House did not include language in its defense authorization bill, the committees may decide to include stronger language in the bill if the Air Force does not initiate the pilot program before the end of the summer, said the sources. Conference between the Senate and the House is not expected until September.

Another congressional source said the House had looked into including similar language, but dropped it amid concern that anything to do with tankers could cause “angst” among members. An additional concern was how fee-for-service contracts could affect the number of actual tankers the Air Force would purchase, the source said.

But ultimately, the Air Force already has the statutory authority to use fee-for-service contracts, the source said.

Commercial companies that want to provide air refueling services to the Air Force will have to develop a boom technology, because the Air Force is the only service that uses that technology. The aircraft used for tanking services will also have to receive FAA certification.

For companies to turn a profit on such a contracting model, they would have to have a guarantee of a certain number of flying hours a year, at a minimum 1,000 to 1,200.

The Navy, for example, hired Omega Air for part of its tanking needs. Early this year, the Navy renewed its five-year contract with Omega. Omega flies two Boeing 707 aircraft for the Navy’s tanking services and has a DC-10 aircraft going through certification with the Navy.

A Defense Science Board report calculated an Air Force cost of $17.50 per gallon to deliver gas with the current tanker fleet. Omega’s 707’s have been able to operate at just under $7per gallon for the Navy contract.

“The Navy has been extremely pleased with our services because we have proven a very reliable and cost effective way to supplement their refueling needs,” said Ulick McEvaddy, co-founder of Omega Air. “Clearly, the Air Force needs a new fleet of modern tankers. We would welcome the opportunity to participate in an Air Force program.”

While Omega owns the niche of aircraft tanking for the Navy and the Marine Corps and is trying to make inroads with the Air Force, companies such as Atlas Air and Evergreen International Aviation have been pressing their cases as well. Atlas Air already is a major provider of charter services to the U.S. military, through the Air Mobility Command and the Civil Reserve Air Fleet Program.

Meanwhile, a team of Northrop Grumman and EADS North America is competing against Boeing to replace the Air Force’s old tankers. The service is currently evaluating proposals. The Air Force plans to buy 179 aircraft under its KC-X program. Northrop Grumman and Boeing spokesmen said that the companies are focused on their proposals for the KC-X program. A Boeing spokesman said the company is also interested in the “Part B” fee for service aspects of the program and looks forward to more information on this subject.

Repeated phone calls for comment to the Air Force were not returned by press time.