As the U.S. military expresses concern over escalating fuel costs stressing defense budgets, Boeing reports that the U.S. Air Force could pay as much as $44 billion more in fuel bills over 40 years to operate a fleet of 179 Airbus A330-200 aerial refueling tankers, compared with a similar number of tankers based on the Boeing 767-200ER.
This assessment is based on a Conklin & de Decker Aviation Information study, funded by Boeing, that calculated the Air Force’s cost with oil at $130 per barrel, $150 per barrel and $200 per barrel.1 Oil prices hit a record high last week above $147 a barrel, and many analysts expect prices to continue climbing. Escalating fuel costs are a critical military concern. As the largest consumer of fuel in the Department of Defense (DOD), the Air Force, for example, spends an additional $600 million annually for each $10 increase in the price of a barrel of oil, spending approximately $6.6 billion on aviation fuel costs in 2006 alone.
“Boeing’s primary focus and objective, as always, is on our customers’ operational needs — and affordable life cycle cost is a key component to any aircraft acquisition,” said Dave Bowman, vice president and general manager of Boeing Tanker Programs. “This is even more evident today as our Air Force customer seeks the most affordable and capable solution.”
Conklin & de Decker, an independent aviation research company, recently recalculated fuel price costs for the Boeing 767-200ER and the Airbus A330-200, popular commercial twin-aisle aircraft that are being converted to military aerial refueling tankers. The larger, heavier A330 is less fuel-efficient than the 767-200ER and, as a result, consumes 24 percent more fuel per trip than the 767-200ER. The study also factored in estimated costs of refining, transportation, storage, handling and fueling the aircraft.
The Air Force’s Request for Proposals (RFP) called for a highly capable, medium-sized, low-risk and low-cost refueling tanker to replace its aging fleet of KC-135 tankers. However, on Feb. 29, the Air Force selected Northrop Grumman-EADS to build 179 next-generation tankers based on the A330. The DOD called for a recompetition after the Government Accountability Office (GAO) urged the Air Force to reexamine 10 of 15 significant issues in Boeing’s protest of the contract award. Among the sustained issues, the GAO concluded that fuel costs needed reevaluation. The report stated that “even a small increase in the amount of fuel that is burned per hour by a particular aircraft would have a dramatic impact on the overall fuel costs.” The Air Force is now preparing a new RFP for an expedited competition.
For a copy of the Conklin & de Decker fuel study, visit www.globaltanker.com.
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Comments (5)
In the Conklin & de Decker fuel study I found on page
two this statement:
A previous analysis (documented in a report entitled “Fuel Consumption Analysis of the Boeing 767-200ER and Airbus 330-200 in Commercial Service when operated at High Take-off Gross Weight” dated November 12, 2007) established that:
• The Airbus 330-200 consumes about 24% more fuel than the B 767-200ER.
Where can I find the study
"“Fuel Consumption Analysis of the Boeing 767-200ER and Airbus 330-200 in Commercial Service when operated at High Take-off Gross Weight” dated November 12, 2007"?
Posted on July 18, 2008 03:46
Since the prognosis said the Boeing bid was cheaper, why not just reward Boeing on that basis?No need to re-bid, just award the winner: Boeing!
Posted on July 19, 2008 19:46
I believe we are all missing the point of the re-bid. What the Pentagon is going to do is this, they will change the RFP so that the A-330 meets the requirements of the proposal.
It will be then up to Boeing to decide what there next step will be, to re-bid or just walk away. In my opinion this entire process is just a case in point of the USAF/DOD spending tax payers dollars for whatever they have a whim for....not what they really need.
I hope Boeing and our Congressmen and Senators continue the fight and for a change tell the USAF/DOD what they are going to get....live with it!
Posted on July 22, 2008 07:42
Fuel consumption is not only going from a place A to B, but how much fuel can you ofload, cargo and people that you can cary for an amount of fuel used by the plane. Given that the Northrop tanker is the best by far
Posted on August 19, 2008 03:54
We need to preserve the ability to manufacture these on American soil. If another world war breaks out, we will have to protect the logistics system of getting our partially assembled tankers from France to the US intact, and then put them together. Of course, our tankers will be prime targets and with that in mind, we cannot outsource our national security. No refueling tankers means a very limited air force and navy. Based on the numbers, the GOA concluded that the Airbus uses more fuel, is much larger on the ground, and delivers less payload for the cost than the Boeing. That is why Italy and Japan have chosen it--because it is better hands down. Congress needs to get involved and give them funding contingent on ordering from Boeing. Even if this was about the best value and not an issue of national security, the Airbus still doesn't win by the GOA's analysis. Boeing was willing to bid the 777, which has a larger payload, etc. But that wasn't what the Air Force asked for--they wanted a capable, medium sized tanker with low risk. The 767 has been in military service for a number of years and represents the best product for the requirements.
Posted on September 10, 2008 08:54
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