Airbus conquers US airspace with fuel tanker coup
When it comes to military flying, the exciting stuff gets done by planes with pointy noses and bristling weaponry under the wings.
Governments lavish money on fighter jets because they look menacing and blow things up, which is a much easier sell to taxpayers and citizens than boring transporters or aerial petrol stations.
However, as is often the case in life, the flash fighters can only be flash because there are aircraft in support keeping the mission going. Defence procurement tends to go in cycles and after years of investing in fighter programmes governments are now lining up to buy support aircraft, often replacing planes that have been in service for decades.
The UAE Air Force said last week that it had bought three new air-refuelling tankers from EADS, which owns Airbus. On Friday the United States Air Force announced that it too is buying Airbus in the first phase of a $100 billion (Dh367bn) project to replace its tanker fleet. The first order will be for 179 aircraft in a deal worth more than $35bn.
The Americans’ decision to buy Airbus is nothing less than astounding. The European aerospace company has been competing against Boeing, the giant US-based defence contractor.
Nobody in the defence world gave EADS and its partner Northrop Grumman much chance of winning the tanker contract – and even senior executives within EADS were more optimistic about their chances of winning the lottery than this deal.
Boeing is a vast corporation spanning military, commercial and space flight. It employs tens of thousands of people across the US and can call on political favours almost at will. EADS faced a near impossible task convincing US officials to buy its plane, which is part assembled in (sharp intake of breath) France. The lobbying has been intense and EADS could not have experienced a tougher competition if it had renamed itself Taliban Aerospace.
Boeing seemed a certainty to win, even though the A330 airframe being offered by EADS is considerably more capable than Boeing’s 767 tanker product.
The EADS KC30, as the military version is called, can fly further, carry more fuel, carry more cargo and carry more troops. It is also a much younger airframe than the 30-year old 767.
The KC30 is a multi-role, combined transporter and refueller and that is why countries such as Australia, Saudi Arabia, the UAE and the United Kingdom have all selected the aircraft.
Boeing has sold its 767 to only Italy and Japan but the Italian aircraft are four years late already and I hear that both countries are considering ditching their orders in favour of EADS.
Given that the US has the largest air force in the world, it is reasonable to expect that its commanders know a thing or two about planes. We sceptics should have had more faith in their ability to pick the right aircraft. We should also have remembered that the US Department of Defence (DoD) has been embarrassed by Boeing on this deal once already, and generals have long memories.
The US has been looking to replace its tankers for years. Most of the existing fleet of 500 KC-135 Stratotankers started flying before the Vietnam war and their replacement had become the DoD’s highest equipment priority.
After the 9/11 attacks the US airline industry collapsed and Boeing was left with dozens of unfulfilled orders for 767 aircraft. It stitched up a deal with the DoD to lease the aircraft as refuelling tankers and the contract was slipped into the US budget. The deal was almost complete when Senator John McCain, now the Republican presidential nominee, stumbled across it and raised merry hell about the lack of competition. He insisted on proper congressional oversight and it gradually emerged that the deal was even murkier than it at first seemed.
Soon after securing the tanker deal, Boeing hired Darlene Druyan, the USAF’s procurement officer who had helped to arrange the lucrative lease. Druyan and Michael Sears, Boeing’s chief financial officer, were subsequently jailed over the matter. Phil Condit, Boeing’s chief executive, resigned and the company was fined $615 million.
So not only has Boeing tried to win the tanker contract unethically, it has also offered a less capable aircraft than its rival. In hindsight, we should have known Boeing couldn’t win.
For the UAE, the USAF’s decision to go with Airbus certainly endorses its decision to buy the aircraft. And the best news for the UAE is that it placed its order four days before the US – and therefore won’t have to wait 20 years to receive its planes.
(David Robertson is business correspondent for The Times of London)
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