U.S. Air Force - Boeing 767 Tanker Lease Explained
(Note to Editors: On July 11, the United States Air Force gave the U.S. Congress a proposal to lease 100 Boeing 767 air refueling tankers, to address a critical national security need and to get an essential military asset quickly into the hands of U.S. warfighters. The Air Force, the Office of Management and Budget, and The Boeing Company worked together to develop a fair and equitable proposal for the taxpayer and for the nation. The following is the first in a series of five background papers designed to assist you in coverage of this issue.)
WASHINGTON, JULY 14, 2003 As the United States is called upon to protect its national interests around the globe, in-flight refueling capabilities have become critical to America's battlefield success. In the past decade, military operations in Kosovo, Afghanistan and Iraq have reinforced the importance of air refueling tankers – the US military's "airborne gas stations" – to our sustained military operations. But the age, lower reliability and cost of operating and maintaining today’s Air Force fleet of more than 500 KC-135 air refueling tankers can and will put unacceptable limits on the projection of American air and overall military power.
The Air Force has expressed growing concern about the condition of 1950s-era 707-class aircraft and about the cost effectiveness of operating, maintaining and upgrading a tanker fleet, which is more than 40 years old. To address the situation, the Air Force began to explore new ways to begin recapitalizing the tanker fleet.
In 2001, Congress authorized the Air Force to explore the viability of leasing 100 Boeing [NYSE: BA] 767 tankers. The Secretary of the Air Force made it clear from the beginning of negotiations that the service would not proceed with a lease unless it could negotiate the best program value for both the American taxpayer and the American warfighter.
The final proposal does just that. In May 2002, the Congressional Budget Office estimated that a tanker lease program could cost as much as $31 billion. But, working together, Boeing, the Air Force and the Office of Management and Budget have developed a lease program that is 50 percent less expensive than that original estimate.
The 767 tanker lease program provides clear value to the taxpayer and provides the best solution for the Air Force to begin recapitalization of the tanker fleet. Here's why:
The Air Force must begin replacing its aging tanker fleet. Demand for tankers has skyrocketed due to the war on terrorism, with more than 23,000 missions flown in Afghanistan and Iraq alone. The Boeing 767 tankers meet this national security need. Leasing the tankers provides the best value and is the quickest way to put an essential asset in the hands of the nation’s warfighters. It's a fair and equitable deal for the taxpayer and for the nation.