NY Times OPEd article on Tanker Leasing

[John Bailey]

http://www.nytimes.com/2003/10/28/opinion/28BROO.html
(quoting)
U.S. Air Force would lease 100 refueling tankers, modified Boeing
767's, from an entity controlled by the Boeing Corporation.
This whole mess started because the Air Force can't pay for new
tankers up front, so it tried to push back the costs by leasing.
The Congressional Budget Office estimates that the leasing option will
cost taxpayers an extra $5.6 billion, though scandal connoisseurs will
appreciate that the deal also involves the use of "special purpose
entities," the accounting mechanisms used by Enron executives in their
glory days. Speaker Dennis Hastert's effort to ram through an Air
Force tanker deal for the Boeing Corporation. This deal isn't just
shady — it's the Encyclopaedia Britannica of shady. (end quotes)

John Bailey
http://home.rochester.rr.com/jbxroads/mailto.html

[Kevin Brooks]

(John Bailey) wrote in message >...
> http://www.nytimes.com/2003/10/28/opinion/28BROO.html
> (quoting)
> U.S. Air Force would lease 100 refueling tankers, modified Boeing
> 767's, from an entity controlled by the Boeing Corporation.
> This whole mess started because the Air Force can't pay for new
> tankers up front, so it tried to push back the costs by leasing.
> The Congressional Budget Office estimates that the leasing option will
> cost taxpayers an extra $5.6 billion, though scandal connoisseurs will
> appreciate that the deal also involves the use of "special purpose
> entities," the accounting mechanisms used by Enron executives in their
> glory days. Speaker Dennis Hastert's effort to ram through an Air
> Force tanker deal for the Boeing Corporation. This deal isn't just
> shady ? it's the Encyclopaedia Britannica of shady. (end quotes)
>
> John Bailey
> http://home.rochester.rr.com/jbxroads/mailto.html

Gee, who'd have thunk the NYT would oppose something thet the USAF and
DoD want? What is Hastert's big gain in this? This all looks a bit
one-sided to me; maybe the NYT should go investigate why the RAF is
also pursuing a tanker lease program...

Brooks

[Matt]

The UK Advanced Tanker/Transport is going to be leased because we're going
through a competitive bidding process, and the end product 'should' cost
less than buying outright over the product lifetime. Personally, I still
think they should buy outright - if they extend the aircraft's flying life,
like they've done with the VC-10 and Tristar, it gets expensive fast.
Besides, we tried this with the C-17's - and because of the masses of extra
time we've put on them through Afghanistan and Iraq, it's going to cost the
UK taxpayer a ton of cash.

The US tanker program, whilst very nessesary, is really just a sop to Boeing
because they didn't win the JSF program - and it's going to cost more than
buying outright even if they stick to the projections. Come on, no
competitive bidding process? As far as I know, the USAF is howling that they
should buy the tankers, not lease them - why, with that extra $5.6 billion,
they could buy one, maybe two extra F/A-22's!

Matt

"Kevin Brooks" > wrote in message
om...
> (John Bailey) wrote in message
>...
> > http://www.nytimes.com/2003/10/28/opinion/28BROO.html
> > (quoting)
> > U.S. Air Force would lease 100 refueling tankers, modified Boeing
> > 767's, from an entity controlled by the Boeing Corporation.
> > This whole mess started because the Air Force can't pay for new
> > tankers up front, so it tried to push back the costs by leasing.
> > The Congressional Budget Office estimates that the leasing option will
> > cost taxpayers an extra $5.6 billion, though scandal connoisseurs will
> > appreciate that the deal also involves the use of "special purpose
> > entities," the accounting mechanisms used by Enron executives in their
> > glory days. Speaker Dennis Hastert's effort to ram through an Air
> > Force tanker deal for the Boeing Corporation. This deal isn't just
> > shady ? it's the Encyclopaedia Britannica of shady. (end quotes)
> >
> > John Bailey
> > http://home.rochester.rr.com/jbxroads/mailto.html
>
> Gee, who'd have thunk the NYT would oppose something thet the USAF and
> DoD want? What is Hastert's big gain in this? This all looks a bit
> one-sided to me; maybe the NYT should go investigate why the RAF is
> also pursuing a tanker lease program...
>
> Brooks

[William Wright]

"Matt" > wrote in message
...
> The UK Advanced Tanker/Transport is going to be leased because we're going
> through a competitive bidding process, and the end product 'should' cost
> less than buying outright over the product lifetime. Personally, I still
> think they should buy outright - if they extend the aircraft's flying
life,
> like they've done with the VC-10 and Tristar, it gets expensive fast.
> Besides, we tried this with the C-17's - and because of the masses of
extra
> time we've put on them through Afghanistan and Iraq, it's going to cost
the
> UK taxpayer a ton of cash.
>
> The US tanker program, whilst very nessesary, is really just a sop to
Boeing
> because they didn't win the JSF program - and it's going to cost more than
> buying outright even if they stick to the projections. Come on, no
> competitive bidding process? As far as I know, the USAF is howling that
they
> should buy the tankers, not lease them - why, with that extra $5.6
billion,
> they could buy one, maybe two extra F/A-22's!

No the extra $5.6 billion would be used to keep the KC-135s flying. The USAF
is saying that if they buy them they will be delivered 2009-2016. If they
lease them they will be delivered 2006-2011. As far as a sop to Boeing. The
767 is the only aircraft in the running. The only way the USAF can get new
tankers in the next five years is to use this aircraft. Period. Since the
lease has a most-favored-customer and a return-on-sales cap for all of
Boeing commercial and military aircraft sales I don't see how the USAF is
going to get them any cheaper. Since the leased aircraft will not be owned
by The Boeing Company but the KC-767A USAF Tanker Statutory Trust which will
sell bonds to raise the capital, feel free to buy a bond if you think this
is such a gold mine.

It is also the only airframe the USAF could buy if they need any more AWACS
in the next five years. Anyone that thinks the USG will assume the risk and
cost to have Airbus develop a competing product in light of Airbus' stated
objective to drive Boeing out of the commerical aircraft market is brain
damaged. The USAF, unlike some in Congress, understands the long term
strategic damage to US interests of buying Scarebus.

Perhaps people should read the report to Congress rather than an OpEd piece
from a source that has had a few making-it-up problems of late.

>
> Matt
>
> "Kevin Brooks" > wrote in message
> om...
> > (John Bailey) wrote in message
> >...
> > > http://www.nytimes.com/2003/10/28/opinion/28BROO.html
> > > (quoting)
> > > U.S. Air Force would lease 100 refueling tankers, modified Boeing
> > > 767's, from an entity controlled by the Boeing Corporation.
> > > This whole mess started because the Air Force can't pay for new
> > > tankers up front, so it tried to push back the costs by leasing.
> > > The Congressional Budget Office estimates that the leasing option will
> > > cost taxpayers an extra $5.6 billion, though scandal connoisseurs will
> > > appreciate that the deal also involves the use of "special purpose
> > > entities," the accounting mechanisms used by Enron executives in their
> > > glory days. Speaker Dennis Hastert's effort to ram through an Air
> > > Force tanker deal for the Boeing Corporation. This deal isn't just
> > > shady ? it's the Encyclopaedia Britannica of shady. (end quotes)
> > >
> > > John Bailey
> > > http://home.rochester.rr.com/jbxroads/mailto.html
> >
> > Gee, who'd have thunk the NYT would oppose something thet the USAF and
> > DoD want? What is Hastert's big gain in this? This all looks a bit
> > one-sided to me; maybe the NYT should go investigate why the RAF is
> > also pursuing a tanker lease program...
> >
> > Brooks
>
>

[Peter Kemp]

On or about Thu, 30 Oct 2003 18:35:14 GMT, "William Wright"
> allegedly uttered:

>It is also the only airframe the USAF could buy if they need any more AWACS
>in the next five years.

Why, when AWACS solutions are currently being built on 767, 737,
Il-76, P3, and the Embraer version which Brazil is taking? And since
the USAF has no need for an AWACS replacement, the point is moot,
although the 767 has been selected for the M2C2A (If I got that one
right).

>Anyone that thinks the USG will assume the risk and
>cost to have Airbus develop a competing product in light of Airbus' stated
>objective to drive Boeing out of the commerical aircraft market is brain
>damaged.

Indeed, since Airbus has already developed said product, with both the
Luftwaffe and the Canadian Forces signed up to have some of their
A310-300s converted to tanker transport config, and the A330 version
being bid for the RAF FSTA program. So the risk to the USAF would be
minimal.

As for the stated aim - is it a surprise that a company wants to puts
it's competitor out of business? What doing you think Boeing would
like to happen to Airbus now that Airbus has taken over as the larger
company in civil aviation?

---
Peter Kemp

Life is short - Drink Faster

[Vee-One]

"Peter Kemp" <peter_n_kempathotmaildotcom@> wrote in message
...
> On or about Thu, 30 Oct 2003 18:35:14 GMT, "William Wright"
> > allegedly uttered:
>
> >It is also the only airframe the USAF could buy if they need any more
AWACS
> >in the next five years.
>
> Why, when AWACS solutions are currently being built on 767, 737,
> Il-76, P3, and the Embraer version which Brazil is taking? And since
> the USAF has no need for an AWACS replacement, the point is moot,
> although the 767 has been selected for the M2C2A (If I got that one
> right).
>

Close. It's the MC2A or the E-10, whichever you prefer. And the basic idea
is a one airframe replacement for the E-3 AWACS, E-8 JointSTARS, and the
EC-135 Rivet Joint. My personal opinion is "good friggin' luck".

(M)Sgt Peter Vierps
116th AMXS

[Yeff]

On Thu, 30 Oct 2003 21:54:25 -0500, Vee-One wrote:

> and the EC-135 Rivet Joint.

Nit: The RJ is an RC-135.

-Jeff B. (who spent 10 years in ESC/AFIC/AIA)
yeff at erols dot com

[Vee-One]

"Yeff" > wrote in message
...
> On Thu, 30 Oct 2003 21:54:25 -0500, Vee-One wrote:
>
> > and the EC-135 Rivet Joint.
>
> Nit: The RJ is an RC-135.
>
> -Jeff B. (who spent 10 years in ESC/AFIC/AIA)
> yeff at erols dot com

Thanks. 2 out of 3 ain't bad, tho.

Pete (guess which 2 I have worked)

[Yeff]

On Thu, 30 Oct 2003 21:59:50 -0500, Vee-One wrote:

> Thanks. 2 out of 3 ain't bad, tho.

<g>

> Pete (guess which 2 I have worked)

Security Service and ESC? ;->

-Jeff B. (who decided to make you older than the hills for no reason)
yeff at erols dot com

[Vee-One]

"Yeff" > wrote in message
...
> On Thu, 30 Oct 2003 21:59:50 -0500, Vee-One wrote:
>
> > Thanks. 2 out of 3 ain't bad, tho.
>
> <g>
>
> > Pete (guess which 2 I have worked)
>
> Security Service and ESC? ;->
>
> -Jeff B. (who decided to make you older than the hills for no reason)
> yeff at erols dot com

Sorry, I was referring to the airframes (and since I don't know my RC from
my EC.........) :->

Pete

[Kevin Brooks]

"Matt" > wrote in message >...
> The UK Advanced Tanker/Transport is going to be leased because we're going
> through a competitive bidding process, and the end product 'should' cost
> less than buying outright over the product lifetime. Personally, I still
> think they should buy outright - if they extend the aircraft's flying life,
> like they've done with the VC-10 and Tristar, it gets expensive fast.
> Besides, we tried this with the C-17's - and because of the masses of extra
> time we've put on them through Afghanistan and Iraq, it's going to cost the
> UK taxpayer a ton of cash.
>
> The US tanker program, whilst very nessesary, is really just a sop to Boeing
> because they didn't win the JSF program - and it's going to cost more than
> buying outright even if they stick to the projections. Come on, no
> competitive bidding process? As far as I know, the USAF is howling that they
> should buy the tankers, not lease them - why, with that extra $5.6 billion,
> they could buy one, maybe two extra F/A-22's!

*What* competitiive bidder is out there? Airbus? Which has still not
flown any kind of flying boom equipped aircraft (flying a couple of
passes with a fighter tucked in behind one of their jets is a long way
from proving they can deliver flying boom equipped tankers in a timely
manner). Boeing is the undisputed king of the hill when it comes to
producing such aircraft, as nobody else has done it (caveat--McD-D did
it with the KC-10, but guess who owns them now?). Selection of the 767
also offers greater future commonality (the E-10 is also going to be a
767 airframe).

Check back into what the USAF wants--it *wants* (many say urgently
*needs*) a replacement for the KC-135E's ASAP, not in the ten or
fifteen years it will have to wait if it proceeded with procurement
versus lease. I believe your read on their desires is a bit faulty.

If leasing is such a bad idea, why do most commercial air carriers use
this option? Why has the RAF not only pursued lease of those tankers,
but also is leasing aircraft as small (and cheap) as Beechcraft
Kingairs? For that matter, why is the private auto lease such a
popular route?

Yep, it may cost a few dollars more in the long run--but what price do
you place on trying to keep those E models flying for the additional
years required if a purchase option is chosen instead? How do you
value the greater utility of the 767 tanker, available for use eight
to ten years earlier under lease, versus those older KC-135 models?

Brooks

>
> Matt
>
> "Kevin Brooks" > wrote in message
> om...
> > (John Bailey) wrote in message
> >...
> > > http://www.nytimes.com/2003/10/28/opinion/28BROO.html
> > > (quoting)
> > > U.S. Air Force would lease 100 refueling tankers, modified Boeing
> > > 767's, from an entity controlled by the Boeing Corporation.
> > > This whole mess started because the Air Force can't pay for new
> > > tankers up front, so it tried to push back the costs by leasing.
> > > The Congressional Budget Office estimates that the leasing option will
> > > cost taxpayers an extra $5.6 billion, though scandal connoisseurs will
> > > appreciate that the deal also involves the use of "special purpose
> > > entities," the accounting mechanisms used by Enron executives in their
> > > glory days. Speaker Dennis Hastert's effort to ram through an Air
> > > Force tanker deal for the Boeing Corporation. This deal isn't just
> > > shady ? it's the Encyclopaedia Britannica of shady. (end quotes)
> > >
> > > John Bailey
> > > http://home.rochester.rr.com/jbxroads/mailto.html
> >
> > Gee, who'd have thunk the NYT would oppose something thet the USAF and
> > DoD want? What is Hastert's big gain in this? This all looks a bit
> > one-sided to me; maybe the NYT should go investigate why the RAF is
> > also pursuing a tanker lease program...
> >
> > Brooks

[William Wright]

"Peter Kemp" <peter_n_kempathotmaildotcom@> wrote in message
...
> On or about Thu, 30 Oct 2003 18:35:14 GMT, "William Wright"
> > allegedly uttered:
>
> >It is also the only airframe the USAF could buy if they need any more
AWACS
> >in the next five years.
>
> Why, when AWACS solutions are currently being built on 767, 737,
> Il-76, P3, and the Embraer version which Brazil is taking? And since
> the USAF has no need for an AWACS replacement, the point is moot,
> although the 767 has been selected for the M2C2A (If I got that one
> right).

Only the 767 is an AWACS. The AWACS is a specific system. The others are
AEW&C. Only the 767 has been integrated with AWACS radar and computers. If
anything happens to the existing fleet, only the 767 AWACS can be built as a
replacement in less than 5 years. It would take at least that to turn any
other airframe into an AWACS. It would take at least that for the Air Force
to field some other AEW&C aircraft. Sure hope none of them are lost in
combat or to terrorism on the ground. How about a tornado that hits Tinker?
Ever see the pictures of the damage to the B-36s at Fort Worth after a
tornado?

>
> >Anyone that thinks the USG will assume the risk and
> >cost to have Airbus develop a competing product in light of Airbus'
stated
> >objective to drive Boeing out of the commerical aircraft market is brain
> >damaged.
>
> Indeed, since Airbus has already developed said product, with both the
> Luftwaffe and the Canadian Forces signed up to have some of their
> A310-300s converted to tanker transport config, and the A330 version
> being bid for the RAF FSTA program. So the risk to the USAF would be
> minimal.

Since EADS just announced in the last month that they were going to spend
$80m (or maybe it was 80m Euros) to develop a boom, I would say they don't
have a product. And the Air Force said in the tanker pitch to Congress that
the EADS boom development is a risk item.

>
> As for the stated aim - is it a surprise that a company wants to puts
> it's competitor out of business? What doing you think Boeing would
> like to happen to Airbus now that Airbus has taken over as the larger
> company in civil aviation?

No, it is no surprise that is the Scarebus goal. What is a surprise is first
that they admitted it and second they think they have any chance in hell of
selling tankers to the USAF. Why would the USG buy aircraft from a foreign
supplier to help put an American company out of business. I doubt any
Congressperson wants to defend that at re-election time. I believe that the
Air Force would develop a new air frame first (think about $8-10b).

"The war with Boeing will continue to intensify until Airbus has 100% of the
worldwide commercial market" Jean Pierson, former Managing Director, Airbus
Industrie

As much bitching as the EU does about Microsoft makes statements like that a
little eye opening don't you think?

Personally I refuse to ride on Scarebus. If it ain't Boeing I ain't going.
After their dishonest attempt to sabotage the market for the 777, I will
never fly on their products again.


>
> ---
> Peter Kemp
>
> Life is short - Drink Faster

[Kevin Brooks]

Peter Kemp <peter_n_kempathotmaildotcom@> wrote in message >...
> On or about Thu, 30 Oct 2003 18:35:14 GMT, "William Wright"
> > allegedly uttered:
>
> >It is also the only airframe the USAF could buy if they need any more AWACS
> >in the next five years.
>
> Why, when AWACS solutions are currently being built on 767, 737,
> Il-76, P3, and the Embraer version which Brazil is taking?

You really think the Il-76 is a candidate?! And how are you going to
squeeze all that radar and workstation space into an Embraer?
Hint--the E-3 AWACS is quite a bit more capable than your Embraer
AEW&C's...

And since
> the USAF has no need for an AWACS replacement, the point is moot,
> although the 767 has been selected for the M2C2A (If I got that one
> right).

Just say "E-10"; it is a lot easier. And if you check into the plans
for the E-10, you will indeed find that it is scheduled to replace the
E-3 in the future (remember that the E-3's are a rather low-density
asset which continue to rack up hours, and do not have an infinite
airframe life). Rolling the AWACS mission into a multi-mission
platform is going to be required; versatility is the new watchword, as
purchase of single-mission aircraft is getting prohibitive (note that
we now even have worked on fielding a roll-on communications relay
package for the KC-135's in order to expand their usefullness).

>
> >Anyone that thinks the USG will assume the risk and
> >cost to have Airbus develop a competing product in light of Airbus' stated
> >objective to drive Boeing out of the commerical aircraft market is brain
> >damaged.
>
> Indeed, since Airbus has already developed said product, with both the
> Luftwaffe and the Canadian Forces signed up to have some of their
> A310-300s converted to tanker transport config, and the A330 version
> being bid for the RAF FSTA program. So the risk to the USAF would be
> minimal.

Quite a difference between a flying boom tanker and a transport
trailing a couple of hose/drogue units. How many USAF fixed wing
combat aircraft can be fed by hose/drogue? Zero. How many existing
companies, worldwide, have built boom tankers? One-- Boeing. Where is
Airbus in terms of developing such a system? "Well, we are planning to
develop and test such a system.." All they have done to date was
conduct a couple of proximity trials (more accurately described as
publicity stunts from what I have read), which is quite a far call
from "already developed such a product".

>
> As for the stated aim - is it a surprise that a company wants to puts
> it's competitor out of business? What doing you think Boeing would
> like to happen to Airbus now that Airbus has taken over as the larger
> company in civil aviation?

Is it a surprise that the US would be interested in preserving such a
strategic resource? I guess it is OK for Europe to pursue that rather
comical A400 plan because they want to "buy European", but it is
apparently not OK for the US to pursue a similar goal?

Brooks


>
> ---
> Peter Kemp

[Vee-One]

"Kevin Brooks" > wrote in message
om...
> Peter Kemp <peter_n_kempathotmaildotcom@> wrote in message
>...
> > On or about Thu, 30 Oct 2003 18:35:14 GMT, "William Wright"
> > > allegedly uttered:
> >
>
<SNIP>
>
> Just say "E-10"; it is a lot easier. And if you check into the plans
> for the E-10, you will indeed find that it is scheduled to replace the
> E-3 in the future (remember that the E-3's are a rather low-density
> asset which continue to rack up hours, and do not have an infinite
> airframe life). Rolling the AWACS mission into a multi-mission
> platform is going to be required; versatility is the new watchword, as
> purchase of single-mission aircraft is getting prohibitive (note that
> we now even have worked on fielding a roll-on communications relay
> package for the KC-135's in order to expand their usefullness).
>

The current plans that I know of involve developing the basic airframe and
interior "work-area" layout, and integrating a ground-coverage sensor system
first (like the current JointSTARS) called Spiral 1. Then following it on
by attempting to integrate the air-coverage system (AWACS) in Spiral 2. If
integrating Spiral 2 proves unfeasible, the plan is to use the same basic
airframe and work-area package to house the AWACS-type equipment by itself
(picture the current E-3 and E-8, but on newer airframes and with newer
equipment).

(M)Sgt Peter Vierps
116 AMXS