Military Airlift: C-17 Aircraft Program
Order Code RL30685
Military Airlift: C-17 Aircraft Program
Updated June 5, 2007
Christopher Bolkcom
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Military Airlift: C-17 Aircraft Program
Summary
The C-17 Globemaster III is a long-range cargo/transport aircraft operated by
the U.S. Air Force since 1993. Congress approved development of the aircraft in the
late 1970s, when it was recognized that the Air Force did not have enough airlift
capability. In 1981, the McDonnell Douglas C-17 emerged as winner of a
competition with Boeing and Lockheed to develop a next-generation aircraft to
replace C-130s and C-141s.
Full-scale development of the C-17 got underway in 1986, but technical
problems and funding shortfalls delayed the program, leading to slipped schedules
and increased costs. Despite those difficulties, the C-17 has retained broad
congressional support and enjoys strong Air Force and Army backing. Defense
officials view the C-17 as essential because of its ability to fly long distances with
large payloads yet still use smaller bases in remote areas.
The C-17 first flew in 1991, about a year later than originally scheduled.
Deliveries began in 1993, and initial operational capability (IOC) was declared in
June of that year. C-17s have been successfully employed in military operations in
Bosnia, Kosovo, Afghanistan, Iraq, and also in support of several humanitarian/
disaster relief operations.
Production problems in the late 1980s raised questions about the possibility of
more cost-effective alternatives. In April 1990, Defense Secretary Cheney reduced
the projected buy from 210 to 120 planes. In late 1993, the Department of Defense
(DOD) gave the contractor two years to solve production problems or face
termination of the contract, with airlift shortfalls to be filled by modified commercial
transport planes or existing military airlifters.
By the mid-1990s, the program’s difficulties had been largely resolved, although
some questioned the number of C-17s to be procured. In 1996 DOD approved plans
to order 80 more C-17s for a total of 120 aircraft — increased in late 1998 to 134.
In June 2001, DOD announced its decision to acquire 137 C-17s, which would bring
the Air Force’s million-ton-miles-per-day capability to 45.3. Through FY2007, $59.4
billion has been provided for the C-17 program.
DOD planned to end C-17 production at 180 aircraft in FY2007, but both
authorizers and appropriators voiced concern over that plan. Appropriators provided
$2 billion in un-requested funding to purchase 10 additional C-17 aircraft and
directed DOD to fund the program in FY2008.
The C-17 program is at the center of a number of airlift debates that confront
policymakers. These issues include, but may not be limited to airlift needs and
requirements, cost and budget, and industrial base issues.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Performance Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Production and Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Basing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
C-17 in Recent Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Potential Tradeoffs with C-5 Modernization . . . . . . . . . . . . . . . . . . . . . . . . . 7
Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
“Bad Actors” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Industry and Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Appendix 1. System Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Appendix 2. C-5 and C-17 Availability, and Readiness Comparisons . . . . . . . 28
List of Figures
Figure 1. Number and Cost of An-124 Missions Contracted by Air
Mobility Command . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Figure 2. DOD Base Budget and GWOT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Figure 3. Comparison of C-5 and C-17 Capabilities . . . . . . . . . . . . . . . . . . . . . 14
Figure 4. C-17 Globemaster III Taking Off from Unfinished Runway . . . . . . . . 27
List of Tables
Table 1. C-5 Modernization vs. C-17 Procurement . . . . . . . . . . . . . . . . . . . . . . . 9
Table 2. Life-Cycle Cost (LCC) Estimates of Potential Alternatives to
Modernizing the Strategic Airlift Fleet . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 3. C-5 and C-17 Capabilities over 30 Sorties Considering Desired
Mission Capable Rates (MCR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 4. C-17 FY2008 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 5. C-17 FY2007 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 6. C-17 FY2006 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 7. C-17 FY2005 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Military Airlift: C-17 Aircraft Program
Introduction
Background
The Air Force’s C-17 Globemaster III is a long-range cargo/transport aircraft
manufactured by Boeing (since its acquisition of McDonnell Douglas in 1997).
Powered by four turbofan engines made by Pratt & Whitney, the C-17 is expected to
meet U.S. strategic (long-range) airlift requirements, complementing the tactical
(shorter-range) airlift capabilities of the C-130 Hercules cargo/transport planes built
by Lockheed-Martin. The C-17 can carry some 169,000 lbs of outsize or oversized
cargo (e.g., Abrams tanks and Apache helicopters) and can operate from smaller
runways than the larger C-5 Galaxy strategic airlifter.
The program had a difficult time winning the support of Congress in the late
1970s. The main hurdle at the program’s outset was that the Air Force had not clearly
demonstrated a need for additional strategic airlift capacity. Funding was finally
approved to begin development in FY1981. Just when the program was getting
under way, however, DOD decided in early 1982 that the airlift shortfall was too
urgent to await development of a new plane and that it would also be better to buy
some planes already in production. Congress approved funds in the FY1983 budget
to purchase 50 additional C-5 cargo planes (made by Lockheed Martin) and 44 new
KC-10 Extender aerial refueling aircraft (then made by McDonnell Douglas) to make
up part of the airlift shortfall in the shortest time possible.1 Since the Air Force
wanted to develop the C-17 as well as to buy additional C-5s, Congress directed the
service to develop a comprehensive description of its future acquisition plans. The
result was the Airlift Master Plan of September 1983, which compared several
alternatives for modernizing the airlift fleet and concluded that the C-17 was the most
cost-effective.
Performance Considerations
The Air Force states that the performance characteristics of the C-17 are
significantly better than those of other cargo/transport aircraft. The C-17 can land on
shorter runways and is more maneuverable on the ground than the larger C-5 or
commercial transport planes, such as the Boeing 747, which require much longer and
wider runways. That requirement limits the number of available bases, and the
1 The KC-10 is a large aircraft. In addition to 356,000 lbs of fuel, it can carry up to 75 troops
and 170,000 lbs of cargo. The KC-10 fleet represents approximately 12% of all of DOD’s
organic airlift capability. For more information, see CRS Report RS20941, Air Force Aerial
Refueling, by Christopher Bolkcom.
CRS-2
number of aircraft that can use a base at any one time (called “maximum on the
ground” or MOG by logisticians). In explaining the November 1995 decision to buy
another 80 C-17s, DOD officials cited as a critical feature their calculations that eight
C-17s could land and offload 3,852 tons per day in a space where only three modified
747s could operate delivering 1,754 tons per day.
The C-17 is also expected to be more cost-effective than its competitors based
on projected life-cycle costs. The C-17’s performance in the “reliability,
maintainability, and availability evaluation” exercises of July-August 1995 confirmed
its supporters’ expectations about operational capabilities with favorable cost
implications, in part because fewer people are needed to operate and maintain the
aircraft.
As part of the 1993 omnibus agreement between the Air Force and McDonnell
Douglas, DOD agreed to change certain contract specifications that were causing
design and cost problems. The most noteworthy of these changes included cruise
speed reduced from Mach 0.77 to Mach 0.74; maximum payload from 172,200 lb to
169,000 lb; and ferry range from 4,600 nm to 4,300 nm. Air Force General Ronald
Fogleman, then head of the U.S. Mobility Command, said these changes did not
affect critical operational requirements, explaining that a 3,200-mile mission with a
110,000-lb payload had been established as a goal and that the C-17 would meet or
exceed this requirement.
Production and Schedule
The C-17 program has experienced a noteworthy amount of turbulence, and
planned purchases and inventories have been increased and decreased over time.
The FY1985 budget included $129 million to begin full-scale development of
the C-17 — then to be produced in a 210-aircraft program. The Airlift Master Plan
had projected a requirement for 210 C-17s, with 180 in the active fleet and 30
additional aircraft for backup and spares and for testing and evaluation. The Air
Force would also retain 114 C-5s but would turn many of these over to the Air Force
Reserve and Air National Guard. By the mid-1980s the C-17 program appeared to
be on track, if somewhat behind schedule. Production difficulties later delayed the
program further, with slipped schedules and rising development costs. In April 1990,
Defense Secretary Dick Cheney reduced the program from 210 to 120 production C-
17s, reflecting revised estimates of airlift requirements in view of the collapse of the
Soviet Union, as well as domestic budgetary restraints.
The Air Force agreed in December 1993 to buy another 12 C-17s during
FY1994- FY1995, but Defense Secretary Les Aspin stated that the contract would
end with the 40 aircraft then on order if McDonnell Douglas failed to resolve
production and cost problems during that two-year period. In that event, DOD would
buy a mix of C-17s and modified commercial transport planes, or C-5 military
transports to replace the aging C-141 Starlifter. By accepting the 1993 agreement,
McDonnell Douglas incurred a loss of nearly $1.5 billion on the development phase
of the program. In addition, the company agreed to spend $456 million in process
improvements and testing. DOD agreed to provide an additional $438 million for the
CRS-3
program — $237 million to settle claims with McDonnell Douglas and $201 million
for flight testing.
In November 1995, the Defense Department decided to continue procurement
of the C-17 for a total program of 120 aircraft instead of meeting airlift requirements
with a mix of C-17s, modified Lockheed C-5s, and Boeing C-33s. The military
services argued that additional airlift capacity was critical and that if C-17s were not
procured, other less capable cargo/transport aircraft would be needed to make up the
shortfall. Most Members of Congress recognized the need for additional airlift,
although some questioned the need to buy as many as 80 more C-17s.
In January 1996, the Defense Acquisition Board (DAB) approved plans to buy
80 C-17s (for a total of 120 aircraft) over a seven-year period (FY1997-FY2003) in
a multiyear contract that would be less expensive than either single-year buys or
multiyear procurement over a longer period (with savings estimated at 5% of a
projected program cost of $18 billion). The Air Force argued that buying the C-17
in six or seven years would provide the planes sooner and more cost-effectively and
would avoid funding competition with other Air Force programs after 2003. Critics
argued that such a long-term contract could entail financial penalties for reducing
annual buys, if budgetary constraints in future years were to force the Air Force to
choose between buying C-17s or other aircraft, such as F-22A Raptor.
On May 31, 1996, the Air Force and McDonnell Douglas (now owned by
Boeing) signed a $16.2-billion multi year procurement contract for 80 aircraft to be
produced over seven years. The first of these 80 aircraft was delivered on August 10,
1998, bringing total deliveries to 41 aircraft. In late 1998, 14 more aircraft were
added to planned buy, bringing the planned total to 134 C-17s. By late 2002, the Air
Force had taken delivery of 100 C-17s.
In early 2002, Air Force officials said that even more C-17s are needed. Chief
of the U.S. Transportation Command, Gen. John Handy, said that he wanted 222 C-
17s to meet the nation’s airlift needs.2 Gen. Handy’s advocacy represented an
increase of at least 42 aircraft from the desires of his predecessor. Former head of the
U.S. Transportation Command, Gen. Charles “Tony” Robertson testified in April
2001 that he needed 170 to 180 of the aircraft to meet requirements outlined in
DOD’s Mobility Requirements Study 2005 (MRS-05).3 In August 2002, Boeing was
awarded a $9.7 billion contract to produce an additional 60 C-17s, which would bring
DOD’s total inventory to 180. This contract was expected to keep the Long Beach,
CA production line open until 2008.4 Final assembly at the Long Beach plant would
2 Harry Levins, “Transportation Command’s Chief Emphasizes the Need for More C-17
Cargo Planes,” St. Louis Post-Dispatch, February 2, 2002, p. 9.
3 Marc Selinger, “DoD Needs More C-17s to Eliminate Airlift Shortfall, AMC Commander
Says,” Aerospace Daily, April 27, 2001.
4 Peter Pae, “Boeing Lands $9.7 Billion C-17 Contract,” Los Angeles Times, August 16,
2002.
CRS-4
have begun on the last aircraft, in June 2007 and be completed in April 2008,5 but
appropriations conferees provided an unrequested $2 billion in FY2007 to purchase
an additional 10 C-17 aircraft.
Basing
Active duty C-17s are based at Charleston AFB, SC (437th Airlift Wing),
Hickam AFB, HI (15th Airlift Wing), McChord AFB, WA (62nd Airlift Wing),
McGuire AFB, NJ (305th Air Mobility Wing), and Travis AFB, CA (60th Air
Mobility Wing, CA). All have Air Force Reserve or Air National Guard associate
units that share aircraft with their active duty host wing. Additional active associate
relationships are planned at Dover AFB, DE (436th Airlift Wing) and Elemendorf
AFB, AK (3rd Wing). Dover AFB received its first of twelve C-17s in May 2007
and Elemendorf is scheduled to receive eight C-17s in 2007. The Air Force Reserve
operates eight C-17s at March Air Reserve Base, CA (452 Air Mobility Wing) and
the Air National Guard operates eight at Jackson International Airport, MS (172nd
Airlift Wing). Recent additions to C-17 procurement will be used to increase the
backup aircraft inventory from nine to sixteen aircraft. Additional C-17 procurement
and potential basing remains controversial for some Members of Congress.
C-17 in Recent Operations
The C-17 has been used in a number of military operations, including Joint
Endeavor (Bosnia) Allied Force (Kosovo), Northern/Southern Watch (Iraq), Atlas
Response (Mozambique and South Africa), Enduring Freedom (Afghanistan) Iraqi
Freedom (Iraq). Also, the C-17 has been used to support peacekeeping operations,
such as delivering cargo to peacekeepers in Darwin, Australia who were preparing
to quell the ethnic fighting in East Timor, Indonesia. (1999). C-17s have also been
used to support humanitarian and relief efforts. In 1999, for example, C-17s from the
437th Airlift Wing delivered cargo to victims of Hurricane Mitch in Honduras and
Nicaragua and, in 2001, they carried federal relief workers and 30,000 lbs of supplies
to flood-soaked Houston, Texas.6
The C-17 was first systematically employed in a major contingency beginning
in December 1995, when U.S. and allied nations deployed peacekeeping forces to
Bosnia in support of Operation Joint Endeavor. In the first three months of
operations, Air Force mobility forces flew 3,827 missions, carried over 18,539 troops
and delivered more than 45,000 short tons of cargo. The C-17 — used to satisfy the
Army’s need for high-capacity, short distance air transport to move peacekeepers,
equipment and outsize cargo from Central Europe to the Bosnia area of operations
— flew slightly more than 26 percent of the missions but delivered over 44 percent
5 Final assembly of the Globemaster takes approximately 10 months. Meeting between CRS
and USAF Directorate of Global Reach (SAF/AQQ). April 19, 2006. Rosslyn, VA.
6 Harold Kennedy, “Charleston’s C-17s Flying Wherever There’s a Runway,” National
Defense, December 2000; “C-17 Hauls Supplied to Houston,” Charleston (SC) Post and
Courier, June 13, 2001.
CRS-5
of the cargo.7 Globemaster crews reportedly offloaded cargos of some 165,000 lb in
less than 15 minutes.8 GAO assessment of the C-17’s performance during Joint
Endeavor (GAO/NSIAD-97-50) found good news to report. The C-17’s mission
capable rate was reported to be 86.2 percent, 5 percent higher than the required 81.2
percent. On the other hand, the GAO wrote that the C-17 was not required to perform
many tasks which it had previous trouble doing, or could not do during operational
testing. These tasks included landing at small austere airfields on short, wet runways,
performing strategic airdrops of both troops and equipment, and providing
aeromedical evacuation capability.
The C-17’s ability to operate from austere airfields in Albania and Macedonia
was further demonstrated during the Operation Allied Force in March-June 1999,
when C-17s achieved a 96-percent mission-capable rate. In their joint testimony
before the Senate Armed Services Committee, Secretary of Defense William Cohen
and Chairman of the Joint Chiefs of Staff General Henry Shelton extolled the C-17’s
contributions to the Kosovo conflict. They said that “...the C-17 was the workhouse
of the airlift force, providing for the rapid deployment of critical warfighting and
humanitarian materiel.” Furthermore, they testified that
Throughout Operation Allied Force, U.S. forces had to overcome many
limitations in transportation infrastructure. Poor airport surface conditions in
Tirana, Albania, for example, slowed aircraft turnaround times, limited
throughput, and slowed the onward movement of forces and humanitarian
supplies. Our transportation and other logistic assets proved to be flexible,
effective, and efficient in responding to these limitations. In particular, the C-17
made the concept of direct delivery — the strategic air movement of cargo from
an aerial port of embarkation to an airfield as close as practicable to the final
destination, a reality.9
Air Force officials said that the C-17s high payload capacity, ability to land on short,
austere airfields, and its ground maneuverability were the keys to success during this
operation.
Almost all of the Air Force’s inventory of 50 C-17s were involved in the Balkan
operation and the Globemaster flew half of the strategic airlift missions required by
the operation.”10 The U.S. Air Force reports that C-17s from Charleston AFB, SC,
7 U.S. Army Office of Public Affairs, Task Force Eagle SFOR X Stabilization Force,
[http://www.globalsecurity.org/military/ops/joint_endeavor.htm];
[http://www.tfeagle.army.mil/default2.asp]
8 U.S. General Accounting Office, C-17 Globemaster — Support of Operation Joint
Endeavor, GAO/NSIAD-97-50, February 1997.
9 Joint Statement of Secretary of Defense William S. Cohen and Chairman of the Joint
Chiefs of Staff General Henry H. Shelton, in U.S. Congress, Senate Committee on Armed
Services, Kosovo After-Action Review, hearing, 106th Cong., 1st sess., October 14, 1999, pp.
11-12, (Washington: GPO, 1999).
10 U.S. Department of Defense, Report to Congress, Kosovo/Operation Allied Force After-
(continued...)
CRS-6
had flown 1,092 missions into the theater as of June 29, 1999, with a departure
reliability rate of 96 percent. C-17 was also used extensively for intra-theater
operations. Twelve C-17s flew 430 intra-theater airlift missions.11
The Air Force has consistently praised the C-17’s performance in support of
Operation Enduring Freedom, the war against terrorism in Afghanistan. Nearly 170
C-5 and C-17 cargo planes have been dispatched to create an “air bridge” to this
distant, landlocked theater of operations.12 C-5 aircraft bring cargo and troops from
the United States to staging bases in Europe and the C-17s fly directly to forward
operating bases in Afghanistan. C-17s fly from Ramstein Air Base in Germany to
Afghanistan, approximately 26 hours each way and 10,000 miles round trip.13 C-17s
have also flown missions from U.S. bases directly to forward operating locations in
Afghanistan.14
While distance is clearly a challenge, overflight, and infrastructure challenges
appear to be even more burdensome. Most of the Afghan airfields from which C-17s
operate are short (~3,500 feet), and strewn with debris and potholes. Some airfields
are nothing more than packed dirt. C-5s cannot operate from these primitive
airfields.15 For security reasons, C-17s offload cargo as quickly as possible (usually
with engines running), make unscheduled landings, and fly seemingly erratic routes.16
In addition to moving personnel and war materiel, C-17s conducted numerous
food drops early in the campaign. Beginning on October 7, 2001, the first day of the
war, the Air Force began flying two to four food-drop flights per day. From an
altitude of 25,000 feet, each C-17 unloaded about 17,000 humanitarian daily rations
over Afghanistan.17
Air mobility operations, as expected, played a significant role in the Iraq war.
Reports suggest that airlift operations were largely satisfactory, and that the C-17
airlift aircraft performed well. Air mobility missions accounted for 16,740, or 40%,
10 (...continued)
Action Report, January 31, 2000, p. 40.
11 Anthony Cordesman, “The Lessons and Non-Lessons of the Air and Missile Campaign
in Kosovo,” Center for Strategic and International Studies, March 5, 2000.
12 Eric Schmitt, “Busy Skies Over Asia Controlled from U.S.,” New York Times. October 14,
2001.
13 David Castellon, “C-17s Get Roar of Approval For Role In Afghanistan,” Air Force
Times, May 27, 2002, p. 34.
14 Tony Capaccio, “Boeing $9.6 Bln Deal for More C-17s To U.S. Said Due Next Month,”
Bloomberg.com., April 26, 2002.
15 Seena Simon, “Air Force Makes Play for More C-17s,” Air Force Times, March 18, 2002,
p. 26.
16 Lt. Col. Douglas Lefforge, “C-17 Is Vital to War on Terror,” Air Force News Archive,
February 5, 2002.
17 Richard Newman, “Tankers and Lifters for a Distant War,” Air Force Magazine, January
2002.
CRS-7
of the 41,404 sorties (excluding sorties by special operations forces and Army
helicopters, and “coalition sovereignty flights”) in the war.18 The U.S. Transportation
Command reported that by April 10, 2003, it had flown 16,213 air mobility missions
for the war, exceeding the total number of such missions flown in the 1991 Persian
Gulf war.19
The requirement for U.S. strike aircraft to fly around rather than through Turkish
airspace increased aerial refueling requirements because those aircraft now had to fly
longer missions. Turkey’s decision not to allow the U.S. Army’s 4th Infantry
Division to attack northern Iraq from bases in Turkey increased airlift requirements
because establishing a U.S. ground presence in northern Iraq then had to be done
primarily by air. Fifteen C-17 aircraft executed one of the largest air assaults in recent
memory, airdropping 1,100 paratroopers from the Army’s 173rd Airborne Brigade.
To buttress this force, U.S. airlift aircraft transported an additional million pounds
of equipment, several M-1 Abrams tanks, and another 1,000 soldiers.
Issues
The C-17 program is at the center of a number of military airlift issues that
confront policymakers. These issues include, but may not be limited to trade-offs
with C-5 modernization, cost, budget, risk, and industrial base issues.
Potential Tradeoffs with C-5 Modernization
At issue in this year’s budget is how many C-17s to purchase and how many C-
5As to modernize. As it did last year, the Air Force is proposing not to procure any
C-17s in FY2008; although two C-17s are on the Air Force’s Unfunded Priority List
(UPL). Boeing representatives say that depending on their success in negotiating
near-term international sales of the C-17, it will require funding for between 14 and
18 Globemasters in FY2008 or the production line will begin to shut down in January
or February 2008 toward a complete shutdown in mid-2009.20 The Air Force’s stated
plan is to modernize both C-5A and C-5B fleets with the Avionics Modernization
Program (AMP), and Reliability Enhancement and Re-Engining Program (RERP).
There has been speculation that as budgets become tighter, the Air Force may opt not
to RERP the C-5A fleet. Recent press reports about RERP cost increases have added
to this speculation.21
18 Lt. Gen. T. Michael Moseley, USAF Commander, Operation IRAQI FREEDOM — By the
Numbers, USCENTAF, Assessment and Analysis Division, Unclassified, April 30, 2003,
pp. 7-8.
19 Chuck Roberts, “C-130 Crews Keep The Supplies Coming,” Air Force News, April 16,
2003.
20 Telephone conversation between CRS and Boeing officials. February 26, 2007. “Boeing
Announces C-17 Line May End in mid-2009; Stops Procurement of Long-lead Parts.” News
Release. Boeing Integrated Defense Systems. March 2, 2007.
21 See, for example, Carlo Munoz. “Air Force Mulling Future of Dueling C-5 Modernization
(continued...)
CRS-8
Some argue that C-17 procurement should be increased at the C-5A’s expense
because of the growing need to engage terrorists and insurgents in theaters with
limited aviation infrastructure. The Cold War paradigm of using strategic cargo
aircraft to move large amounts of materiel to forward U.S. bases, then moving it a
second time to the theater of operations on smaller airlift aircraft is not efficient, they
argue. The C-17 can do the job of both the C-5 (strategic airlift) and the C-130
Hercules (intra-theater airlift) and move war materiel directly from the United States
into combat, if need be. As a more modern aircraft, the C-17 also potentially offers
more opportunity for upgrades and modifications than the C-5.
On the other hand, the C-5’s unique capabilities argue for its continuation,
potentially at the expense of additional C-17s. In a period where DOD’s force
posture is moving from forward basing to expeditionary, it may be unwise to
prematurely retire aircraft in today’s inventory. Although the C-5 is not as modern
as the C-17, the Air Force’s Fleet Viability Board found that the C-5A fleet — with
appropriate investments — has at least 25 years of life remaining.22 Thus, today’s
investments could potentially be recouped for decades. Current estimates of the per-
aircraft cost of AMP and RERP are expected to be approximately one-third that of
a new C-17, and the C-5 will carry twice the C-17’s payload. The C-5 also has
superior load/off load capabilities. The upgraded aircraft (called the C-5M), is also
expected to have greatly improved mission capable rates.23 It may be noteworthy that
during Operations Enduring Freedom and Iraqi Freedom, DOD leased Russian An-
124 aircraft to carry outsize and oversize cargo because not enough C-5 aircraft were
available.
The An-124 Condor is a strategic lift aircraft larger than, but comparable to, the
C-5. As Figure 1 below illustrates, the Air Force has spent $170 million since
FY2002 for An-124 missions. It also appears that the number of An-124 missions is
accelerating. FY2007 figures already are on par with FY2005 figures, and the fiscal
year is not yet half over. While the C-5 may not be as modern as the C-17, or able to
operate from as many runways, the fact that DOD has to outsource missions to
Russian aircraft indicates that the C-5 still offers important capabilities that other
U.S. aircraft may not be able to satisfy.
21 (...continued)
Programs.” Inside the Air Force. December 16, 2006. Amy Butler. “C-5 Reengining Cost
Could Alter Program Course.” Aviation Week & Space Technology. February 19, 2007.
22 Tech. Sgt. David A. Jablonski. “Air Force Fleet Viability Board releases C-5A
Assessment,” Air Force Print News, July 15, 2004. Amy Butler, “With a Little Help — And
Cash — C-5As Can Fly For 25 More Years, Panel Says,” Defense Daily, July 19, 2004.
23 David Hughes, “C5 Avionic and Engine Upgrades Rolling,” Aviation Week & Space
Technology, October 25, 2004. C-5 Galaxy Modernization, FY2006 Point Paper, Lockheed
Martin Corp, July 2005.
CRS-9
Figure 1. Number and Cost of An-124 Missions Contracted by Air
Mobility Command
140
120
100
80
#Missions
$Millions
60
40
20
0
02
03
04
05
06
07
FY
TOTAL: 434 missions. $168,434,265.00
Source: USAF Air Mobility Command. International Airlift Procurement Branch. Feb. 23, 2007.
Costs
Although the metrics needed to objectively evaluate the number of C-17s or C-
5s required are not clear, it is clear that C-17 procurement and C-5 modernization
are directly competing for the same budget authority. In recent months, for example,
senior Air Force officials have proposed purchasing 30 additional C-17s instead of
modernizing 30 C-5As. It is argued that the life-cycle cost of these 30 additional C-
17s would be offset by the life cycle cost savings accrued by not re-engining the C-
5A fleet. Table 1 outlines some of the relevant cost and procurement information.
Table 1. C-5 Modernization vs. C-17 Procurement
Modernize C-5 Fleet
Buy More C-17s
Average Procurement Unit Costa
$97 Millionb
$280 Million
Est. Flying Hour Costc
$23,075d
$11,330
Production Rate
~12 aircraft/ year
~15 aircraft/year
Aircraft Life Remaining
26,000 hours
30,000 hours
a. Selected Acquisition Report (SAR) Department of Defense OUSD(AT&L). Defense Acquisition
Management Information Retrieval (DAMIR). C-17A, C-5AMP, C-5RERP.
b. These costs have and will likely fluctuate over time. The procurement cost of future C-17s will
likely be lower than the average, as learning increases and fixed costs are amortized over a
longer production run.
c. Aircraft Reimbursement Rates (per Flying Hour) FY2007. Air Force Cost Analysis Agency, Cost
Factors Branch. Table A15-1.
d. Aircraft Reimbursable Rates (per Flying Hour) reflect amortization of modernization programs,
but not procurement costs. Because the C-5 AMP and RERP modernization programs are in
their early phases, these costs strongly affect the hourly cost to operate the C-5. The C-17 is not
implementing a modernization plans on the scale of AMP and RERP.
CRS-10
The Air Force decision to modernize all of its C-5 aircraft was informed by a
March 2000 study by the Institute for Defense Analyses (IDA) on the cost and
reliability implications of various C-17 and C-5 procurement options. The IDA study
noted that earlier studies indicated that
Upgrading the C-5 may be cost-effective if the C-5 is to be retained in the fleet
long enough, the larger question of whether money spent for improving strategic
airlift should be directed toward C-5 improvements or toward some other
improvements, such as adding more C-17s, or even some of both, is an issue.24
The IDA study examined nine different alternatives to modernizing the C-5 and
C-17 fleets. It measured cost effectiveness in terms of the estimated life-cycle cost
(LCC) for each alternative, and found that “...the least costly option is Alternative
6, a full upgrade to the C-5 fleet with no additional C-17s,” and that “...the $5 billion
required for the upgrades in Alt 6 more than pays for itself in reduced operating costs
over the 40-year period examined.”25 The findings of the IDA study are summarized
in Table 2 below.
Table 2. Life-Cycle Cost (LCC) Estimates of Potential
Alternatives to Modernizing the Strategic Airlift Fleet
LCC
LCC
LCC
Alter-
MTM/
C-5A
C-5B
# +
Dis-
Then-
Con-
native
D
upgrade
upgrade
C-17
counted
year
stant $B
$B
$B
1
24.9
-
-
0
60.5
32.9
98.5
2
27.1
-
-
20
72.4
40.8
115.5
3
30.1
-
-
45
87.3
50.4
137.0
4
27.8
-
Full
20
70.2
40.4
110.6
5
30.7
-
Full
45
85.1
50.0
132.1
6
27.2
Full
Full
0
56.7
32.5
89.5
7
32.3
Full
Full
45
83.5
50.0
127.9
8
27.7
-
Full
75
80.2
49.0
120.9
9
27.9
-
-
132
88.3
55.4
129.3
Source: Analysis of Alternatives for Out- and Over-Size Strategic Airlift: Reliability and Cost
Analyses. Institute for Defense Analyses. IDA Paper P-3500. March 2000. Tables 2 and 3 combined
by CRS.
Note: All cost estimates expressed in $FY2000. Constant dollars allow comparisons over different
time periods without inflation. Discounted dollars are adjusted to account for the year in which funds
are expended. OMB discount factor of 2.9% per year used. Then-year dollars represent the estimated
actual outlay of funds through 2040, including inflation.
24 Analysis of Alternatives for Out- and Over-Size Strategic Airlift: Reliability and Cost
Analyses. Institute for Defense Analyses. IDA Paper P-3500. March 2000. p. 2.
25 Ibid. p. 11.
CRS-11
IDA found that the LCC for a re-engined C-5 fleet is lower than one without re-
engining and that the less costly re-engined C-5 fleet also has a higher MTM/D
capacity. Air Force officials have recently argued for early retirement of some C-5As
and perhaps C-5Bs. IDA’s findings argue to many to maintain more C-5s in the
inventory and to procure fewer new C-17s.
Air Force officials have recently reported that they anticipate significant C-5
RERP cost growth. These reports appear to be somewhat at odds with official cost
reports from the DOD Comptroller. The December 2006 Select Acquisition Report
(SAR) for the C-5 RERP showed average procurement unit cost growth of 2.9% over
the current acquisition program baseline (APB) and 16% over the original APB. This
rate of cost growth is significantly lower than 15% and 30% cost growth,
respectively, that is required to trigger a Nunn-McCurdy breech notification. Further,
many of the factors that contributed to RERP cost growth reported in the SAR appear
to be one-time management problems that would not affect future program costs.26
Projections of future cost growth are driven in large part by an Air Force
decision to slow down RERP production and to extend it by two years. Because of
slower production rates, the Air Force estimates — according to Lockheed Martin —
that RERP propulsion system costs would increase, from $6.1 million per engine to
$6.9 million. The Air Force and Lockheed Martin also disagree on the number of
man-hours of touch-labor for each C-5 (i.e. 95,000 hours vs. 100,000 hours) and the
slope of the “labor learning curve” (i.e. 85% vs. 89%). Lockheed Martin argues that
if its cost estimates are proven correct that the RERP program will grow at rates
below the Nunn-McCurdy threshold notification requirement.27
It appears that Air Force officials who forecast significant C-5 RERP cost
growth are obliged to reconcile their estimates with the relatively modest cost growth
reflected in the SAR, and address Lockheed Martin’s arguments. Further, once the
cost growth forecasts are reconciled with official cost growth reports, it would appear
desirable for Air Force officials to explain how this growth would effect the IDA
findings. Specifically, is the estimated cost of C-5 RERP sufficient to make C-5 fleet
LCC more costly than alternative fleets with fewer C-5s and more C-17s?
Budget
Some suggest that retiring some number of C-5 aircraft early could make funds
available to purchase additional C-17s. However, these funds do not “line up.” C-5A
RERP money is found in budget projections beginning in 2014 and the C-17
procurement is an FY2008 issue. Therefore, if more C-17s are to be purchased in
FY2008, Congress and DOD would appear to need to either find room in the Air
Force’s “base budget,” or Congress would need to add funds to DOD’s FY2008
Global War on Terror (GWOT)funding request. Some in the Air Force argue that
26 For example, on p. 4, the SAR notes that in addition to funding and engineering
challenges, the RERP program was significantly delayed by Berry Amendment and
Commercial Commodity determinations.
27 White Paper on C-5 Reliability Enhancement and Re-Engining Program (RERP) Costs.
Lockheed Martin Corp. Undated. E-mailed to CRS on April 27, 2007.
CRS-12
because of noteworthy pressures elsewhere in the Air Force budget, the 30/30
proposal is only executable as an add to the FY2008 GWOT request.28
As depicted in Figure 2 below, defense appropriations exempted from budget
caps (including “bridge funds” for overseas operations provided as separate titles in
the regular defense appropriations bills) have grown considerably in recent years in
both absolute terms and as a proportion of overall defense spending. According to
some experts this growth
reflects a progressive expansion of the kinds of equipment and operational
support that both the Defense Department and Congress have agreed to consider
as sufficiently urgent to warrant inclusion in emergency funding measures, even
though the funding may not meet definitions either of the narrowly defined
incremental costs of military operations, or of what constitutes an emergency by
congressional standards.29
Decisions to add funds to DOD’s FY2008 GWOT request for C-17s are likely
to be influenced by a wider debate on whether some of the large increase in weapons
procurement requested in the FY2007 supplemental goes beyond the expanded
definition of war-related requirements that Congress has come to accept. Those who
are opposed to expanded use of emergency supplementals may argue that adding
funds to the FY2008 GWOT request is inappropriate because the rationale for doing
so is not related to the immediate conflict. Instead, the arguments proffered by the Air
Force pertain to long-term savings. Those in favor of expanded use of supplemental
appropriations may point to congressional action on the FY2007 supplemental, where
Congress provided over $1 billion more than requested for DOD procurement.
28 CRS interview with SAF/FML April 27, 2007.
29 CRS Report for Congress RL33900, FY2007 Supplemental Appropriations for Defense,
Foreign Affairs, and Other Purposes, by Stephen Daggett, Amy Belasco, Pat Towell, Susan
B. Epstein, Connie Veillette, Curt Tarnoff, Rhoda Margesson, and Bart Elias.
CRS-13
Figure 2. DOD Base Budget and GWOT
700
623.1
598.4
600
526
93.4
141.7
501
500
444
443
101
115
70
s
n
69
66
400
o
345
illi
311 14
17
300
B
$
481.4
200
375
377
400
411
435
297
328
100
0
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
Base Budget
Supplementals Enacted
FY07 Supplemental Request
FY08 DoD Budget Request
FY08 GWOT Request
Totals
Source: FY2008 Global War on Terror Request. Department of Defense, February 2007, p.1.
Capabilities
Some argue that C-17 procurement should be increased at the C-5A’s expense
because of the growing need to engage terrorists and insurgents in theaters with
limited aviation infrastructure. The Cold War model of using strategic cargo aircraft
to move large amounts of materiel to forward U.S. bases, then moving it a second
time to the theater of operations on smaller airlift aircraft is not considered efficient.
The C-17 can do the job of both the C-5 (strategic airlift) and the C-130 Hercules
(intra-theater airlift) and move war materiel directly from the United States into
combat, if need be. As a more modern aircraft, the C-17 also potentially offers more
opportunity for upgrades and modifications than the C-5.
On the other hand, the C-5’s unique capabilities may argue for its continuation,
potentially at the expense of additional C-17s. In a period where DOD’s force
posture is moving from forward basing to expeditionary, it may be unwise to
prematurely retire aircraft in today’s inventory. Although the C-5 is not as modern
as the C-17, the Air Force’s Fleet Viability Board found that the C-5A fleet — with
appropriate investments — has at least 25 years of life remaining.30 Thus, today’s
investments could potentially be recouped for decades. Current estimates of the per-
aircraft cost of the Avionics Modernization Program (AMP) and the Reliability
Enhancement and Re Engining Program (RERP) are expected to be approximately
one-third that of a new C-17, and the C-5 will carry nearly twice the C-17’s payload.
Figure 3 provides a comparison of airlift capabilities.
30 Tech. Sgt. David A. Jablonski. “Air Force Fleet Viability Board releases C-5A
Assessment,” Air Force Print News, July 15, 2004. Amy Butler, “With a Little Help — And
Cash — C-5As Can Fly For 25 More Years, Panel Says,” Defense Daily, July 19, 2004.
CRS-14
Figure 3. Comparison of C-5 and C-17 Capabilities
Source: FY06 Congressional Overview (C-5, C-130J). “C-5 Operations During Iraqi Freedom.”
Lockheed Martin Aeronautics Company. p.18.
The potential cost and budgeting considerations of the Air Force’s “30/30
proposal” have been discussed. Replacing 30 C-5 aircraft with 30 C-17s also presents
airlift capability issues. Airlift capability can be measured in different ways, but it
appears clear that on a one-for-one basis, the C-5 can carry more outsize cargo and
more cargo pallets than the C-17. In many cases each C-5 can carry twice as much
of a given piece of outsize cargo as the C-17.31
The C-5’s advantage in size is offset, to a degree, by lower availability. Thus,
Figure 3 above does not compare accurately the two aircrafts’ capabilities over
multiple sorties. Table 3 below illustrates the effect the C-17’s higher availability has
on respective capabilities, and provides a simplified comparison of the capabilities
of 30 C-5s and 30 C-17s.
31 Outsize cargo is defined by DOD as cargo that exceeds the dimensions of oversized cargo
and requires the use of a C-5 or C-17 aircraft or surface transportation: A single item that
exceeds 1,000 inches long by 117 inches wide by 105 inches high in any one dimension.
CRS-15
Table 3. C-5 and C-17 Capabilities over 30 Sorties Considering
Desired Mission Capable Rates (MCR)
C-5M (75% MCR)
C-17 (85% MCR)
M1A1 Abrams
45
25
M2/M3 Bradley
90
51
AH-64 Apache
135
76
Patriot Missile Launcher
45
25
HMMWV TOW
315
255
Pallets
810
459
Max Payload
5,872,500 lb
4,204,950 lb
Source: CRS. Figures extrapolated from data found in Figure 2.
For many, potential cost and capability concerns intersect when reductions to
the size of the C-5 fleet are discussed. The Air Force’s program of record maintains
a fleet of over 100 C-5Ms through the 2040s. If the C-5As are not modernized,
sooner or later the Air Force will be left with a fleet of approximately 50 C-5Ms.
A fleet size of 50 aircraft could create LD/HD (low density / high demand)
challenges addressed briefly in this testimony in the context of the KC-X program.
Both the 1997 and 2001 Quadrennial Defense Reviews identified the challenges of
operating and maintaining small aircraft fleets that are heavily used in peacetime and
in war. Both studies recommended changes to asset management that would reduce
the prevalence of LD/HD aircraft fleets, and Air Force leaders have taken steps, such
as implementing the Expeditionary Aerospace Force (EAF) construct, in part to
mitigate the LD/HD problem.
As mentioned above, the C-5 can carry some cargo too big for the C-17, and
approximately twice as much cargo generally as the C-17. These capabilities suggest
that operational demand for C-5s could remain high, even as the fleet size decreases.
Air Force leaders may wish to explain how, all other things being equal, operating
a relatively small C-5 fleet will or will not create LD/HD challenges they are actively
trying to resolve in other parts of the aerospace force.
“Bad Actors”
As stated earlier, the Air Force’s program of record is to RERP and AMP all C-
5As in the TAI (Total Aircraft Inventory). However, the Air Force has also taken
action to reduce this inventory, such as retiring 14 aircraft in 2004. P.L. 108-136,
Sec. 132 prohibits retiring any C-5A aircraft until the effectiveness of the C-5A
AMP and RERP efforts have been determined through testing and evaluation and
reported to Congress.
CRS-16
During deliberations on the FY2008 budget request, Air Force leaders have
frequently requested permission to retire some number of C-5A aircraft independent
of the test results on C-5A RERP and AMP. To support their request for permission
to retire C-5As, Secretary Wynne and Gen. Moseley have testified that some subset
of the C-5A fleet is composed of “bad actors,” aircraft that are “hard broke” and are
prime candidates for early retirement.
GEN. MOSELEY: In a perfect world, we would like to be able to manage that
inventory and divest ourselves of the bad-acting tail numbers, and some of them
are bad actors; they’re broke. A lot of the C-5As have low flight hours on them
because they’re broke and you can’t fly them.... If I could line up the best B
model or the best A model at the head of a line, a 59-two and 49, and go to the
back end of the line and begin to kill off the bad actors and replace them with
something new, I would be very happy. That doesn’t mean all of them; it doesn’t
mean that we class or block-retire airplanes, it just means let us get at the tail
numbers that are bad actors.32
SEC. WYNNE: There’s some that are really bad actors. And I think if you gave
us the right to manage the fleet, you would find that we would manage it in a way
that would actually retain the best mission profiles....33
SEC. WYNNE: I can tell you, sir, that right now some worry about the entirety
of the C-5 fleet. There are two things we should know about this. First is that we
don’t — we want to line up worst to best, and we think there are between 20, 25
and 30 of bad actors that we would like to retire.34
Some in Congress have appeared supportive of Secretary Wynne’s and Gen.
Moseley’s “bad actor” testimony, and have requested that the Air Force provide a list
of these “hard broke” aircraft, presumably to make a judgement on whether these
aircraft should indeed be retired early.35 Others in Congress have responded to the Air
Force’s “bad actor” statements negatively, expressing concern Congress has not
received “factual data” on the health and performance of the C-5A fleet. These
members oppose the retirement of any C-5As prior to testing and operational
evaluation of fully modernized C-5A aircraft.36
32 Hearing of the House Armed Services Committee on Fiscal Year 2008 National Defense
Budget Request From the Department of the Air Force. February 28, 2007. 2118 Rayburn
House Office Building. Congressional Transcript. Federal News Service, Inc.
33 Ibid.
34 Hearing on the Senate Armed Services Committee on Air Force Authorization Request
for Fiscal Year 2008 and the Future Years Defense Program. March 20, 2007. 325 Russell
Senate Office Building. Congressional Transcript. Federal News Service, Inc.
35 See for example dialogue between Reps. Marshall and Saxton and LtGen. Carol “Howie”
Chandler. Hearing of the Air and Land Forces Subcommittee of the House Armed Services
Committee on Air Force and Army Airlift and Aerial Refueling Fixed-Wing Aircraft
Programs. March 7, 2007. 2118 Rayburn House Office Building. Congressional Transcript.
Federal News Service, Inc.
36 See for example, “Biden and Kennedy Continue Push to Keep C-5 Viable Part of Nation’s
Strategic Airlift.” Press Release. March 26, 2007. [http://biden.senate.gov/newsroom]
CRS-17
To date, it does not appear that the Air Force has provided a list of “bad actor”
C-5As to Congress. There may be several reasons why this list has not yet been
provided. Perhaps the most prominent reason is that comparing the reliability,
performance, and health of a large sample of aircraft is difficult. Despite a number
of recognized measures, or “yard sticks” for measuring these attributes, picking a
subset of C-5 aircraft that are the poorest performers is a subjective exercise
inherently vulnerable to criticism and second-guessing.
An examination of C-5 reliability and maintainability statistics for the past three
fiscal years does not identify any obvious subset of the C-5 fleet that stands out as
notably “bad actors.” Reliability and availability measures studied included the
amount of time spent in depot or otherwise unavailable due to maintenance, mission
capable rate, and mission departure reliability. (Graphical representation of data and
analysis can be found in Appendix 2.)
Some argue that all of the C-5As could be considered bad actors. However, the
Air Force Fleet Viability Board , the Defense Science Board, the Institute for Defense
Analyses have all endorsed the viability of the C-5A fleet. Further, C-5A
performance and reliability is not uniformly inferior to C-5B performance. Over the
past three years, for example, the C-5A fleet has averaged a higher mission departure
reliability rate (83.1%) than the C-5B fleet (81.3%).
Currently, two C-5A aircraft are restricted from flight, and 12 are restricted in
their flight load or flight profile due to a variety of maintenance or repair issues.
Some suggest that these 14 aircraft are appropriate candidates for early retirement.
Counterarguments to retiring these aircraft include, first, that it is estimated to cost
only $26.7 million to repair all 14 aircraft, and second, that eight of the 14 restricted
aircraft require routine modifications to address human-error damage incurred during
routine maintenance. These problems are minor, it is argued, are easily addressed,
and do not warrant early retirement. While this counterargument appears sound, it
also speaks to the value of conducting robust analysis of an aircraft’s maintenance
and performance history and projected future costs and challenges. A single-point
snapshot of an aircraft’s condition can be an incomplete and misleading description
of its health, and, in and of itself, a poor foundation for making retirement decisions.
Risk
Debate over the number of C-5s to modernize and the number, if any, of
additional C-17s to procure frequently touches upon the concept of risk. For
example, when DOD officials defended the FY2006 budget decision to end C-17
procurement, they argued that keeping the C-17 production line open “would be a
smart thing to do” from a pure risk perspective, but “the cost would be prohibitive”
given the other airlift procurement programs that the Air Force plans.37 In a 2005
study on mobility, the Defense Science Board (DSB) also considered risk an issue to
consider in determining the total number of C-17s to purchase.
37 Michael Sirak. Senior DOD Officials Defend Decision To Halt C-17 Production At 180.”
Defense Daily. February 10, 2006.
CRS-18
The task force understands that each year of additional (C-17) production beyond
2008 would represent an additional $2.4 billion acquisition and $2-3 billion life
cycle cost commitment, which the department must weigh against other war-
fighting capabilities it could not acquire. However, in view of the prominence of
organic strategic airlift in enabling rapid response to crises, the task force
believes it is prudent to keep options open for the acquisition of additional C-
17s.38
A key question during this legislative cycle is, how much risk does DOD incur
by allowing the C-17 line to close? Conversely, how much additional security is
purchased by keeping the C-17 line open? Perception of risk is inherently subjective,
but a few observations may help policy makers make an informed assessment. First,
when planning for the C-17 line’s end, the Air Force budgeted $650 million to be
spent shutting down the line in a manner that would facilitate its restoration if
necessary. The advantage of this strategy is that the government pays a one-time sum
to hedge its bets. A disadvantage of “smart shutdown” is that more money will likely
be required to re-start the line, if necessary, and doing so will take time. Purchasing
aircraft predominantly in order to keep the line alive will safeguard rapid production
capability, if required, but will also incur billions of dollars of costs over the
aircraft’s lifetime. A comparison of estimated costs over different time spans between
“smart shutdown,” followed by line restoration, and keeping the C-17 line open via
additional purchases may be useful.
A second observation is that the potential risk incurred by ending C-17
production is not apportioned solely over the airlift fleet. Long-range cargo aircraft
are only one component of a much larger military mobility system. While aircraft
offer advantages over other transportation modes, such as speed and flexibility, these
characteristics may potentially be offered by a mix of other assets. Both the Defense
Science Board and the Congressional Budget Office (CBO) recommended that DOD
improve its mobility capabilities by increased investments in afloat pre-positioning
of equipment, not by large investments in fixed-wing long-range airlift. For example,
the DSB found that
investments now in intermediate staging bases, more and improved force and
sustainment pre-positioning and high-speed, intratheater vessels capable of
austere port access could add significant new capabilities to enable land force
deployments and meet a variety of contingencies. These investments need to be
complemented by incremental investments in aerial tankers and possibly in
strategic airlift. (Emphasis added)39
Both the DSB and CBO found that pre-positioning equipment offered
opportunities to increase the promptness of delivery, a key feature of airlift. For
example, the DSB found, “Pre-positioning is the sole component of the mobility
system that can deliver employable heavy/medium land forces early in a campaign.”40
CBO wrote “Prepositioning sets of unit equipment offers greater improvements in
38 Defense Science Board Task Force on Mobility. Office of the Under Secretary of Defense
(AT&L) September 2005. p.14.
39 Ibid.
40 Ibid. p.10.
CRS-19
the promptness of cargo deliveries than the other options that CBO examined” such
as increasing airlift and fast sea-lift capabilities.41 Further, “increasing the number of
existing ships and aircraft would offer very limited improvements in the promptness
of unit deliveries during large deployments.”42
Further, there are some instances where fielding more aircraft would likely not
increase mobility capabilities, but potentially exacerbate logistical choke-points.
Often, the transportation problem is not too few aircraft, but too few airfields or
infrastructure. A study by the Army’s Military Traffic Management Command found
that the biggest roadblock to achieving the service’s deployment goals is the limited
infrastructure at forward airfields.43 Examples of infrastructure shortfalls include
limited ramp space and loading/unloading equipment. In Operation Allied Force, as
another example, “there were not enough air bases in the area immediately around
Kosovo to support all the aircraft....”44 This finding is significant because the
European theater contains numerous airbases relative to other regions. The CBO
made a similar observation, “Aircraft offer rapid delivery of individual loads, but any
attempt to significantly increase their total cargo deliveries to a distant theater would
probably be hampered by constrained infrastructure at airfields, which is anticipated
for many, if not most, future conflicts.”45
Another potential strategy to mitigate the risk of shutting down the C-17
production line might be to re-invigorate DOD efforts to develop heavy-lift airships.
Until cancelled by congressional appropriators in FY2006, the Defense Advanced
Research Projects Agency (DARPA) was developing a hybrid airship capable of
transporting up to 1,000 tons across international distances. Unlike traditional,
cigar-shaped airships, a hybrid airship is shaped more like an aircraft’s wing, to
generate lift through aerodynamic forces. Advocates hope that such airships may
potentially be capable of carrying a complete Army brigade directly from “the fort
to the fight,” overcoming logistic choke points and mitigating the effects of limited
forward basing. The CBO study estimated that developing and procuring 14-16
heavy-lift airships would have the same life cycle cost as 21 C-17 aircraft ($11
billion) but would deliver cargo at a rate nearly three times greater. Airship detractors
challenge their survivability and their ability to operate in adverse weather.
As mentioned above, acquisition decisions on the amount of airlift capability
to be procured on the KC-X may affect strategic airlift modernization. Similarly,
decisions on the number of C-17s to be procured — due to Globemaster’s ability to
41 Options for Strategic Military Transportation Systems. Congressional Budget Office.
September 2005. p. x.
42 Ibid. pp. x, xiii.
43 Kim Burger, “Army Study: Poor Forward Airfields Jeopardize Deployment Goals,”
Inside the Army, August 21, 2000.
44 Kosovo After Action Review. Secretary of Defense William S. Cohen and Gen. Henry H.
Shelton, Chairman of the Joint Chiefs of Staff. Senate Armed Services Committee, October
14, 1999.
45 Options for Strategic Military Transportation Systems. Op cit. p. x.
CRS-20
operate from short and austere runways — could affect acquisition choices in intra-
theater airlift.
Industry and Exports
Without a commitment in FY2008 to purchase additional Globemasters, the C-
17 production line in Long Beach, CA could begin shutting down as early as June
2007. Some in Congress have encouraged DOD to procure more C-17s than are
currently planned, arguing that airlift needs are increasing.46 Procuring additional C-
17s domestically or exporting them are seen as two potentially complementary
methods of both keeping the production line open and reducing the per-aircraft
production costs.
Appropriations conferees have directed the Air Force to study options for
commercializing the heavy, outsized aircraft for incorporation into the Civil Reserve
Air Fleet (CRAF). (H.Rept. 108-553, p. 77.) Some industry studies suggest that a
commercial market for up to 10 C-17s may exist for use in heavy industry, mining,
or similar endeavors. The Air Force and Boeing have considered a number of
different potential strategies to exploit or expand this potential market.47
The first potential strategy has been called the Commercial Application of
Military Airlift Aircraft (CAMAA). Under CAMAA, DOD would loan money
directly to companies or guarantee the financing of companies which would
purchase C-17s from Boeing. Civilian owners of the BC-17X (as the commercial
variant would be called) would make the aircraft available to DOD in time of need,
much like CRAF. The Air Force proposed several options to sweeten the deal, such
as helping companies find customers who need outsized cargo delivery and providing
them monthly military business paid for at commercial rates. In addition to having
access to these aircraft, the Air Force and civilian users would benefit because
building BC-17Xs for civilian use would effectively exploit excess production
capacity and help lower the per-unit cost of those aircraft bought by DOD.48 In
October 2002 it was reported that DOD’s Business Initiatives Council had approved
the CAMAA program as an “efficiency measure,” but DOD has reportedly cooled
to this particular approach.49
A second potential strategy would be for the Air Force or the General Services
Administration (GSA) to sell used C-17s to commercial companies. Commercial
46 Gail Kaufman, “USAF C-17s May Come Earlier Than Requested,” Defense News, March
29, 2004.
47 Aircraft like the C-17, built to military specifications, tend to be too expensive for civil
users. Trucks, ships, or large commercial aircraft are often used to move large industrial
parts and products.
48 Amy Butler, “Commercial C-17 Buys Would Stabilize Cost, Enhance Reserve Air Fleet,”
Inside the Air Force, December 22, 2000; Christian Lowe, “Air Force Issues Draft
Solicitation for Civilian C-17s,” Defense Week, July 9, 2001.
49 “DoD Business Initiatives Council Supports C-17 ‘Commercialization,’” Defense Daily,
October 16, 2002, p. 8.
CRS-21
clients would, presumably, be interested in used aircraft because they would cost less
than new aircraft. As part of the arrangement, the commercial owner would make
the aircraft available to DOD in times of crisis, thus increasing the potential
inventory of outsize/oversize airlifters available to DOD. The Air Force could use
the profits of the sale to help finance the purchase of new C-17s.
A third potential strategy would be for the Air Force to trade in older C-17s to
Boeing and receive credit to purchase new ones. Reportedly, the Air Force prefers
this approach to selling the aircraft directly to commercial companies because it
would relieve it of any potential responsibility for ensuring the aircraft are certified
for civil application.50
Some question why the Air Force would want to sell any of
its C-17s if there is a growing requirement for them.
The feasibility of any of these strategies is unclear. In a “post-9/11”
environment typified by a declining aviation market, few companies may wish to risk
investing in such expensive cargo aircraft. On the other hand, one private company
— Cargo Force — has publicly stated that it desires to purchase 25 to 80 C-17s, but
allege that DOD is blocking such a sale because it fears that this might reduce the
likelihood that Congress will fund additional C-17s for the Air Force.51
Some also question whether Congress’ appetite for unconventional financing
and procurement strategies in the aftermath of the KC-767 tanker lease proposal.52
Any creative attempts to establish an outsize/oversize commercial market based on
the C-17 would likely have to be done without creating financial liability for DOD.53
While Boeing representatives express confidence that a niche market exists for
a commercial variant of the C-17, Air Force leaders appear uninterested in exploiting
this potential market. In an April 2006 letter to Congress, Secretary Michael Wynne
wrote that the Pentagon’s recent reviews of mobility requirements determined there
is no need for an outsized, commercial aircraft in CRAF.54
Close U.S. allies also have strategic airlift requirements that could potentially
be satisfied by the C-17, and recent news on exports has been promising for Boeing.
50 Cynthia Di Pasquale. “Pentagon Proposes Trading in Older C-17s to Boeing to Grow
CRAF.” Inside the Air Force. April 22, 2005.
51 Dave Ahearn. “Air Force maneuvers to Ensure it Gets 220 C-17s — Analyst.” Defense
Today. March 7, 2005.
52 For more information, see CRS Report RL32056, The Air Force KC-767 Tanker Lease
Proposal: Key Issues For Congress, coordinated by Christopher Bolkcom.
53 Di Pasquale, op.cit.
54 Jason Sherman, “Wynne: No Room for Commercialized C-17 in Civil Reserve Air Fleet,”
Inside Defense.com, April 6, 2006.
CRS-22
In August 2006, the Royal Australian Air Force awarded Boeing a $780 million
contract for four C-17 aircraft.55 Canada has also proposed importing four C-17s.56
Whether the C-17 is successful in the export market will be determined in part
by its competition. The most prominent competition is the European A400 M aircraft.
Having long recognized a deficit in their long range airlift capabilities, several NATO
countries (Germany, France, Spain, Britain, Turkey, Belgium, and Portugal) plan on
purchasing the jointly developed A400M turboprop airlifter. This program has
experienced numerous perturbations in schedule and budget. In December 2002, for
example, Germany announced that it would reduce its planned acquisition of the
A400M from 73 to 60 aircraft. Portugal, it is rumored, is considering cancelling its
order entirely.57 In September 2006 NATO announced that 13 of its members had
signed a letter of intent to jointly purchase four C-17 aircraft.58 If this sale comes to
fruition it would represent a significant boost for the Globemaster’s export prospects,
and a blow to the A400M program.
British defense officials view the C-17 as an asset that can be used in rapid-
reaction operations. The United Kingdom’s Strategic Defense Review of July 1998
indicated that the Ministry of Defense might lease or buy several C-17s to meet air
mobility requirements of Britain’s Rapid Reaction forces. In August 2006 it was
reported that the U.K.’s Royal Air Force had committed to purchasing outright the
four C-17s that it had leased from Boeing and would purchase a fifth aircraft in
2008.59 Britain had “conditionally committed” to purchase 25 Airbus A400M
transports following the C-17 lease. It is unclear whether the U.K. might purchase
additional C-17 instead of the A400M aircraft.
Congressional Action
The Bush Administration’s budget for FY2008 requested $653 million in
overall C-17 funding and is broken down in Table 4. Congressional action is also
described, with changes to the request highlighted in bold text.
55 “Boeing to Provide Four C-17s to Australia Air Force.” Defense Daily. August 1, 2006.
56 “Canada to Spend $1.3 billion for Four Boeing C-17 Globemasters.” Defense Daily.
September 15, 2006.
57 “Germany Trims A400M, Meteor, IRIS-T Acquisitions,” Defense Daily, December 6,
2002.
58 Nicholas Fiorenza. “NATO pools resources to buy C-17s.” Jane’s Defence Weekly.
September 13, 2006.
59 “More C-17s.” Aerospace Daily & Defense Report. August 8, 2006.
CRS-23
Table 4. C-17 FY2008 Funding
($ Millions)
Procurement
R&D
$
#
$
Request
Support
260.6
0
181.7
Mods
211.2
0
Authorization, House
Support
260.6
0
181.7
(H.R. 1585, H.Rept.
Mods
211.2
0
110-146)
2,400.0
10
In addition to recommending funding for 10 additional C-17s, House
Authorizers agreed to an Air Force request to retire C-5 aircraft to facilitate the
purchase of additional C-17s. These retirements, however, could not commence until
after the delivery of the 189th C-17 aircraft and after the Air Force submits an analysis
comparing the costs of purchasing new C-17s versus modernizing the entire C-5
fleet.
The Bush Administration’s budget for FY2007 requested $3 billion in overall
C-17 funding and is broken down in Table 5. Congressional action is also described,
with changes to the request highlighted in bold text.
Table 5. C-17 FY2007 Funding
($ Millions)
Procurement
R&D
$
#
$
Request
MYP
2,636.2
12
173.7
APCY
0.0
Mods
251.4
Authorization Conference
2,288.1
12
173.7
(H.R. 5122, H.Rept.
0.0
109-702)
251.4
Appropriations Conference
2,624.7
12
173.7
(H.R. 5631, H.Rept.
0.0
109-676)
251.4
2,094.0
10
Both authorizers and appropriators expressed concern over DOD’s plan to end
C-17 procurement with FY2007 funds. Both committees directed DOD to apply
funds provided in FY2006 for closing the production line, to purchasing additional
aircraft. H.R. 5122 Sec. 132 requires the Air Force to maintain a minimum of 299
strategic airlift aircraft beginning in FY2009. Appropriations conferees gave the C-17
program a significant boost by providing $2 billion in un-requested funding.
CRS-24
The Bush Administration’s budget for FY2006 requested $4.1 billion in overall
C-17 funding and is broken down in Table 6. Congressional action is also described,
with changes to the request highlighted in bold text.
Table 6. C-17 FY2006 Funding
($ Millions)
Procurement
R&D
$
#
$
Request
MYP
2790.9
15
165.7
APCY
445.4
Mods
260.8
Authorization, Conference
Matched all funding requests
(H.R. 1815, H.Rept.
109-360)
Appropriations,
2790.9
15
167.1
Conference (H.R. 2863,
445.4
H.Rept. 109-359)
176.8
Both house (H.R. 1815 Sec.131) and Senate (S.1042 Sec. 133) authorizers
expressed support for DOD to enter into a new multiyear procurement contract for
42 additional C-17s.
The Bush Administration’s budget for FY2005 requested $4.1 billion in overall
C-17 funding, and is broken down in Table 7. Congressional action is also described,
with changes to the request highlighted in bold text.
Table 7. C-17 FY2005 Funding
($ Millions)
Procurement
R&D
$
#
$
Request
MYP
2,512.5
14
199.7
APCY
381.8
ICS
945.6
Mods
89.1
Authorization Conference
2,546.5
14
199.7
381.8
945.6
89.1
Appropriations
2,671.0
15
201.7
Conference
381.8
786.9
89.1
CRS-25
Appropriations conferees supported the house position to procure 15 C-17s in
FY2005, provide advance procurement for 15 aircraft in FY2006, and fully fund
these aircraft. House appropriators (H.Rept. 108-553, p. 192) were “extremely
displeased by the Air Force’s continued use of a flawed and irresponsible financial
strategy for the C-17 multiyear procurement contract.” Committee members wrote
that the Air Forces’ approach to funding the C-17 was “an incremental financing
scheme that abused the political support for the program and flaunted acquisition
regulations and standard practices.” (H.Rept. 108-553, p. 192) The appropriators
reduction of $159.6 million from the C-17 ICS line funded the increase in MYP.
CRS-26
Appendix 1. System Description60
Power Plant:
Four Pratt & Whitney F117-PW-100 turbofan
engines
Wingspan:
169 feet 10 inches (to winglet tips) (51.76 meters)
Length:
174 feet (53 meters)
Height:
55 feet 1 inch (16.79 meters)
Cargo Compartment:
length, 88 feet (26.82 meters); width, 18 feet (5.48
meters); height, 12 feet 4 inches (3.76 meters)
Speed:
450 knots at 28,000 feet (8,534 meters) (Mach .74)
Service Ceiling:
45,000 feet at cruising speed (13,716 meters)
Range:
Global with in-flight refueling61
Crew:
Three (two pilots and one load master)
Maximum T/O Weight:
585,000 pounds (265,352 kilograms)
Load:
102 troops/paratroops; 48 litter and 54 ambulatory
patients and attendants; 170,900 pounds (77,519
kilograms) of cargo (18 pallet positions)
Figure 4. C-17 Globemaster III Taking Off from Unfinished
Runway
USAF photo by 1st Lt. Laurel Scherer
6 0 Information derived from C-17 Gl obemast er III Fact Sheet,
[http://www.af.mil/factsheets/factsheet.asp?fsID=86] and Air Force Magazine, 2000 USAF
Almanac, May 2000.
61 The first 70 C-17s have an unrefueled range of 4,370 miles with a 90,000 lb load. An extra
fuel tank will be installed in the 71st and subsequent aircraft which will extend the
unrefueled range to 5,060 miles with a 90,000 lb load, Seena Simon, “Extra Fuel Tank
Allows C-17s to Fly Farther,” Air Force Times, April 2, 2001.
CRS-27
Appendix 2. C-5 and C-17 Availability, and
Readiness Comparisons62
Tim
Ti e
m in
i Ma
M in
i te
t neace / M
e /
odi
M
f
odi i
f c
i ati
t on FY
i
0
on FY 5-0
- 7 by Tail
Tai #
l
120.0%
RERP
120.0%
RE
C-5B
-
AM
A P: 1
, 3,
,
5
-9,
- 11-13, 1
5,
5 19
,
, 21,
,
24
21,
, 26,
,
31
-34,
, 3
6,
6 39
,
, 46,
,
48
46,
, 49.
,
100.0%
100.
80.0%
80.
Cl
C ass A M
s A
ish
i
ap
60.0%
60.
40.0%
40.
20.0%
20.
0.0%
0.
1
12
1
23
2
34
3
45
4
56
5
67
6
78
7
89
8
100 111 122 133 144 155
C-17
1
C-5A
5
C-5
C- B
5
C-5s I
-
n
5s I Mai
n
n
Mai t
n e
t n
e an
n
ce F
an
Y
ce F 05-07 b
05-
y
07 b
y Ta
T il
i
l #
70.00%
C-5s
s in RE
RP and AM
and
P Not Incl
ud
u e
d d
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
1 4
7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58
C-5
C- A
C-5B
62 Source of charts, CRS based on data provided by AMC.
CRS-28
Mission Capable Rate FY05-07 by Tail #
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
1
12
23
34
45
56
67
78
89 100 111 122 133 144 155 166
C-17
C-5A
C-5B
Mission Departure Reliability FY05-07 by Tail #
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
1
12
23
34 45
56
67 78
89 100 111 122 133 144 155
C-17
C-5A
C-5B
CRS-29
Comparison of C-5 Fleet for 3 Availability / Reliability Measures FY05-FY07
Wo
W rs
r t C-5
s
s
t C-5 for De
r
pot
o %
Wo
W rs
r t C
t
-
C 5s f
5s o
f r M
r
is
i si
s on C
o
a
n C pable
pabl Ra
e
t
Ra e
Wo
W rs
r t C
t
-
C 5s f
5s o
f r M
r
issi
i
on D
ssi
e
on D part
par ur
t
e
ur Rel
e
i
Rel a
i bil
bi it
i y
Tai
Ta l #
l
Depot%
po
MCR
MC
MXR
Depot%
po
MCR
MC
MXR
MX
Depot
De
%
MCR
MXR
6900000
6900
3
000
58.
58 5
27
83.
83 1
69000014
6900
5.6
26.4
26.
87.3
.
70
7 00016
0
8
0016
0
59.1
59.
50
7000044
7000
5
044
54.
54 2
46.5
46.
84.
84 4
69000003
6900
58.
58 6
27
81.1
.
70
7 00046
0
1
0046
12.6
12.
44.6
44.
70.1
6800021
6800
9
021
47.
47 5
37.2
37.
75
69000025
6900
46.
46 2
27.4
27.
78.9
.
70
7 00046
0
2
0046
24.7
24.
65.3
65.
71.4
7000045
7000
6
045
47.
47 3
29.7
29.
83.
83 3
70000456
7000
47.
47 4
29.7
29.
85.6
.
69
6 00001
0
0
0001
1
65.9
65.
71.4
6900002
6900
5
002
46.
46 2
27.4
27.
78.
78 9
70000451
7000
7.1
33.1
33.
78.9
.
84
8 00005
0
9
0005
63
62.3
62.
73.1
8700003
8700
8
003
39.
39 1
58.6
58.
75.
75 5
68000215
6800
6.1
33.8
33.
82.2
.
70
7 00045
0
7
0045
24.9
24.
34.5
34.
73.2
6800022
6800
0
022
36.
36 5
42.9
42.
84.
84 3
70000457
7000
24.
24 9
34.5
34.
73.2
.
69
6 00002
0
0
0002
22.1
22.
42.6
42.
74.6
6800022
6800
4
022
35.
35 7
45.9
45.
82.
82 2
68000212
6800
30.
30 3
35.7
35.
82.7
.
68
6 00021
0
9
0021
47.6
47.
37.2
37.
75
7000044
7000
7
044
34.
34 3
49.9
49.
83.
83 5
68000219
6800
47.
47 6
37.2
37.
75
85
8 00000
0
5
0000
51.3
51.
58.2
58.
75.6
7000045
7000
3
045
31.
31 1
47
80
70000460
7000
41.
41 5
38.9
38.
83.6
.
87
8 00002
0
9
0002
15.1
15.
62.8
62.
75.6
7000044
7000
6
044
30.
30 9
51.9
51.
81.
81 5
70000455
7000
6.8
39.3
39.
85.6
.
87
8 00004
0
5
0004
42.3
42.
59.6
59.
75.8
6800021
6800
2
021
30.
30 3
35.7
35.
82.
82 7
68000221
6800
2.3
39.7
39.
81.5
.
67
6 00017
0
4
0017
0
48.8
48.
76.9
C-5A Fleet Avg. 21.3
C-5A Fleet Avg. 48.2
C-5A Fleet Avg. 83.1
Tail Numbers
r in:
Ital
t i
al c
i s =
w
=
or
o se t
e han
t
a
han v
a erage
a
i
ge n
i a
lll 3
l
cat
3
egor
cat
i
egor es
Bold
Bo
= among
on the w
t
o
he w rst (
t not
o just
st be
b lo
l w a
w ver
e age)
r
age) in
i two of
o o the thr
h ee cat
r
e
ee cat gor
e
ie
i s
Bold
Bo
and Back
and Ba
groun
gr
d =
oun
d = am
a ong
ong the w
t
o
he w rs
r t i
t n
n all t
l hre
r e
e cat
ca egor
e
i
gor es