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Military

The Civil Reserve Air Fleet - Future Credibility
AUTHOR Major Jeffrey A. Porter, USAF
CSC 1990
SUBJECT AREA Intelligence
			EXECUTIVE SUMMARY
TITLE:   THE CIVIL RESERVE AIR FLEET - FUTURE CREDIBILITY
THESIS:  In the aftermath of airline deregulation, U.S.
strategic airlift capability continues to undergo
significant transformation and has reached the point where
increasing shortfalls exist with little hope for improvement
without federal intervention.
ISSUES:  The importance of strategic airlift to our nation's
ability to project power and execute a planned military
operation has long been recognized.  Our strategic airlift
capability is comprised of a combination of civilian and
military airlift.  During a major conflict, 28 percent of
the cargo and 95 percent of the passengers airlifted would
be flown on commercial aircraft.  The commercial
augmentation is provided by airlines participating in the
Civil Reserve Air Fleet (CRAF).  Airlines voluntarily
participate and, as a result, are eligible DOD civilian
airlift contracts.  In the past, the airlines have purchased
aircraft and managed a system compatible with DOD interests.
They invested in long-range, widebody aircraft, such as the
B-747 and DC-10, which are capable of large cargo loads.
Since airline deregulation, however, market changes have
transformed the composition of civilian airlines.  These
changes have had a negative impact on the CRAF and our
strategic airlift capability.  Many airlines are purchasing
smaller, short-range aircraft.  Also, airlines are leasing
many of their aircraft which makes them ineligible for CRAF
participation.  These and other forces have combined to
deteriorate U.S. strategic airlift capability.
CONCLUSIONS: The U.S. must take steps to increase its
airlift capacity.  There are several possible solutions,
including production of a new military aircraft, federal
legislation, or financial incentives for the airlines to
increase their participation in the CRAF.  This critical
issue must be addressed if the U.S. wants to maintain an
adequate strategic airlift capability in the future.
THE CIVIL RESERVE AIR FLEET - FUTURE CREDIBILITY
                    OUTLINE
Thesis Statement.  In the aftermath of airline deregulation,
U.S. strategic airlift capability continues to undergo
significant transformation and has reached the point where
increasing shortfalls exist with little hope for improvement
without federal intervention.
I.   The Importance of Strategic Airlift
     A.  Introduction/Discussion of Strategic Airlift
     B.  Historical Examples Illustrating Importance
     C.  Present Strategic Airlift Requirements
         1.  Military Airlift Capability
         2.  Civilian Airlift Capability
II.  U.S. Strategic Airlift Policy
     A.  Historical Changes in Policy
     B.  Present Airlift Policy
III. Civil Reserve Air Fleet (CRAF)
     A.  Purpose of the CRAF
         1.  Historical Relationship of Civilian and
             Military Airlift
         2.  CRAF Participation - Requirements and
             Benefits
     B.  CRAF Implementation
IV.  Airline Deregulation
     A.  Reason for Deregulation and Results
     B.  Military and Industry Perspective
     C.  Impact on Strategic Airlift Capability
V.   Possible Solutions for Improving Airlift Capability
     A.  Military Solution
     B.  Possible Civilian Airline Solutions
THE CIVIL RESERVE AIR FLEET - FUTURE CREDIBILITY
     The importance of logistics to any nation's ability to
wage war has long been recognized.  Without adequate
resupply capability, no nation can expect to fight and win a
conflict of any duration.  Most modern armies, including
U.S. forces, normally maintain only a fraction of the
supplies, in any theater, which would be required in a
prolonged conflict.  In essence, logistics is the key to our
ability to project power and execute a planned military
operation.
     This paper will focus on the transportation portion of
the logistics pipeline: specifically, the importance of
strategic airlift to U.S. capability and the role of
civilian airlines to our nations strategic airlift posture.
In the aftermath of airline deregulation, U.S. strategic
airlift capability has continued to undergo significant
transformation.  It has reached the point where shortfalls
exist with little hope for improvement without federal
intervention.
     Historically, our nation has recognized the importance
of having adequate transportation.  Shortly after the
outbreak of World War I, we found ourselves with a private
rail network which was unable to meet our wartime needs.
(16:4-9)  As a result, the national government took over the
rail system and ran it until 1920.  Since that time, the
government has maintained an active interest in our nation's
transportation capability.
     The importance of strategic airlift capability was
recognized during World War II.  At the outset, the military
had very little long-range airlift and was forced to utilize
available commercial transportation.  During the war, the
air carriers operated under the Army and Navy's Air Tranport
Service, but utilized all of their own facilities,
equipment, and personnel. (2:9)  What began in May, 1941 as
the Air Corps Ferrying Command has evolved into the Military
Airlift Command (MAC), a global airlift system supported by
both military and civilian aircraft which has proven itselve
numerous times.  The Berlin airlift, Grenada, Honduras, and
Panama are just a few examples which have demonstrated the
importance of strategic airlift to our nations ability to
respond to a crisis and protect our national interests.
     Recent crises requiring airlift, however, have been
limited in their scope and duration.  U.S. support of Israel
during the 1973 Arab-Israeli war lasted less than ten days
before a cease-fire was in effect.  And more recently, the
U.S. invasion of Panama was made possible by both the short
duration and close proximity of Panama to the U.S..  One of
the key questions we must ask is, "Will our present airlift
capability be adequate for future conflicts?"
     To answer that question, the military has conducted
numerous studies over the last decade to determine the
amount of airlift which would be required for a major
conflict far from U.S. shores.  The most comprehensive of
these studies was the Congressionally Mandated Mobility
Study (CMMS), completed in 1981. (13:10)  This study
concluded that the U.S. would need to triple its airlift
capacity in order to sustain a future world conflict.  The
cost to accomplish this, however, would be prohibitive so a
fiscally constained goal was established.  Current U.S.
policy is to achieve a 66 million-ton-miles per day
(MTM/day) airlift capacity by the year 2000. (13:10)  The
MTM/day terminology represents the ability to move one ton
of cargo one mile per day.  For example, in a European
scenario where the average intercontinental distance is
approximately 2600 nautical miles, our goal would be to
airlift over 25,000 tons per day.  Our current airlift
capacity is comprised of a combination of both military and
civilian aircraft.
     The military strategic airlift capacity is provided by
the C-141, C-5 and KC-10 aircraft.  The C-5 and C-141 are
operated by MAC and can generate approximately 32.7 MTM/day
of airlift capability.  The KC-10 (an aerial
tanker/transport version of the commercial DC-10) is
operated by Strategic Air Command and can generate an
additional 4.5 MTM/day of airlift. (4)  The workhorse of
these airlifters is the C-141 with 267 of them currently in
the active and reserve inventory. (7:24)  It is important to
note that by 1991 the average age of the C-141 will be 26
years.
     The C-5 provides a significant lift capability with the
ability to carry outsize loads such as the M-1 tank.  With
the recent procurement of the C-5B, the U.S. presently has
96 of these heavy airlifters.  While the KC-10 does not
provide a significant airlift capability, its ability to
allow fighters to self deploy is a significant enhancement.
It can air-refuel fighters enroute, while airlifting support
equipment and personnel.  While the total military airlift
capability amounts to 37.2 MTM/day, it falls well short of
the CMMS goal of 66 MTM/day.  To help augment military
airlift, the U.S. relies heavily on the civilian airline
industry.
     During a major conflict, 28 percent of the cargo and 95
percent of the passengers airlifted would be flown on
commercial aircraft. (3)  The civilian carriers provide
airlift to the Department of Defense (DOD) through the CRAF,
which will be discussed in more detail later.  While this
airlift capacity varies, it would amount to approximately 16
MTM/day. (8)   Adding this to the military airlift
capability, it would still fall short of the U.S. goal by
12.8 MTM/day.  While the relationship between military and
civilian airlift assets has evolved over the years, it is a
direct result of our national airlift policy.
     The U.S. has mantained an airlift policy since World
War II which is based on the premise that the military will
not maintain the airlift capability requirement necessary in
wartime.  Rather, it will rely on the augmentation of
civilian assets during a crisis. (15)  The purpose of this
policy is to prevent the military from competing with the
airlines for peacetime business.  Another reason for this
policy is the associated cost of airlift.  It would be cost
prohibitive for the military to procure, operate, and
maintain the necessary number of aircraft required for war
during a peacetime environment.  While this type of policy
makes sense in a democratic society, it is not one which is
adopted by other countries.
     In contrast to our airlift policy, the Soviet Union has
600 fixed-wing strategic airlift aircraft which are
augmented by Aeroflot's 1,600 medium and long-range
transports. (13:12)  Unlike U.S. civilian airlines, Aeroflot
is a direct supporting arm of the Soviet military.  It is
readily apparent that the Soviets maintain airlift assets
well in excess of their peacetime airlift requirements.  The
relationship between the civil and military sectors for each
country differs significantly and it is important to
understand the unique relationship the U.S. maintains
between civil and military airlift.
     As stated earlier, rather than investing in and
maintaining the airlift resources required during a crisis,
the U.S. policy has been to rely on the commercial aviation
sector to augment military airlift when needed.  The CRAF
program was established in 1951 and resulted in civilian
aircraft being identified, by tail number, and allocated for
national defense through three stages of increasing need.
(12:6)  This incremental activation allows the government to
call up only those CRAF assets needed.  The following,
excerpted from MAC Regulation 55-8, details the CRAF stages
available.
     a.  Stage I - Commited Expansion.  This is airlift
     from the long-range international segment, committed
     to CINCMAC.  It can be used to perform airlift
     services when MAC airlift is inadequate.
     b.  Stage II - Defense Airlift Emergency.  This is
     an airlift expansion identified for an airlift
     emergency not warranting mobilization.
     c.  Stage III - National Emergency.  This is the
     total CRAF capability made available during major
     military emergencies.
     While CINCMAC has the authority to implement Stage I of
the CRAF, only the Secretary of Defense can implement Stages
II and III.  The importance of the CRAF to our strategic
airlift capability has long been recognized.  General
Cassidy, while CINCMAC and CINCTRANSCOM, stated during an
August 1989 interview that "Fifty percent of MAC's airlift
resides in CRAF. It is an integral part of the airlift
system.  I consider it frontline and we use it everyday.  It
is a vital portion of the airlift equation...".  There are
several distinct segments which support national airlift
requirements. (10:9)
     The Long-Range International segment supports MAC's
global operations, requiring aircraft such as the B-747 or
DC-10 which are capable of extended overwater operations.
The Short-Range Domestic segment supports short-haul
operations to near offshore locations.  The B-727 and B-737
are aircraft which fall into this category.  Finally, the
Domestic and Alaskan segments support the CONUS supply
distribution system.  While aircraft in these segments make
up the bulk of the CRAF program, there is another program
which the DOD encourages the civilian airlines to
participate in.
     The National Defense Features Program (NDFP) is an
airlift enhancement program designed to increase our
strategic airlift cargo capability. (9)   The DOD modifies,
at its expense, existing passenger aircraft so they can be
quickly converted from passenger to cargo aircraft.  The
aircraft enhancement adds a side door, strengthens the floor
and adds a roller system for cargo operations.  The DOD pays
for the modifications and reimburses the carrier for time
lost on the aircraft and the additional operating expenses
incurred by the increased weight of the aircraft. (9)
     In a National Airlift Policy Statement, signed on June
24, 1987 by President Reagan, it states "The DOD and DOT
shall jointly develop policies and programs to increase
participation in the CRAF and promote the incorporation of
national defense features in commercial aircraft".  By 1990,
CRAF enhancement modifications will contribute 3.3 MTM/day
to our strategic airlift capability. (9)   While the CRAF
remains critical to our national airlift policy, what are
the incentives for participation by the civilian airlines?
     Participation in the CRAF by the airlines is strictly
voluntary.  By entering aircraft into the CRAF, airlines are
eligible to compete for MAC peacetime annual airlift
services contracts.  According to HQ MAC/TRC, this amounted
to over $300 million of airlift business in 1989 shared by
the CRAF carriers.  Therefore, while the DOD and civilian
airlines have had an excellent longstanding relationship,
the airlines are strongly motivated by profit.  The U.S. has
been content, in the past, to let market forces shape U.S.
airline fleets.
     Unlike the Soviets, the U.S. does not dictate to the
civilian airlines how many and what type of aircraft they
will maintain in their inventory.  Historically, U.S.
airlines have operated aircraft which were compatible with
our airlift strategy, but not necessarily our airlift
operations.  The widebody aircraft, such as the B-747 and
DC-10, are desirable not only for their long-range
capability but also their large load capacity.  However,
most civil aircraft are not compatible with the material
handling equipment (MHE) of the U.S. military.
     The shipment of military cargo on civilian airlines
presents a number of unique problems.  Military aircraft,
such as the C-141 and C-5, were specifically designed to
carry cargo with their high wing design and access to the
cargo bay close to the ground.  This is in direct contrast
to civilian aircraft.  Also, military and civilian pallets
are different sizes thereby further complicating loading
between aircraft types.  While these types of problems can
be overcome by modifications in MHE, forces within the
airline industry are occurring as a result of airline
deregulation which are not easily overcome.
     The airline industry was deregulated in 1979, and has
resulted in ten years of dramatic change and struggle for
the industry.  The purpose of deregulation was to increase
competition and stimulate growth in the industry, hopefully,
to the benefit of the consumer.  Initially, a number of
airlines sprang up or expanded to take advantage of this
wide-open market.  At the same time, operating costs were
rising dramatically, because of rising fuel prices, and the
nation's economy slowed down which resulted in fewer people
traveling by air. (12:6)
     As a result, many of the smaller airlines, such as
Braniff in 1981, quickly went out of business, while a
number of airlines struggled through financial difficulties.
(6:1b)  To adapt to the increased competition and changing
market, many airlines adopted strategies which have had a
negative impact on the CRAF capability.
     A number of carriers - Pan American, American, and
United - discontinued their all-cargo service, selling their
freighter aircraft.  In many cases, these aircraft were sold
to foreign airlines, thus decrementing the CRAF.  Also, the
new "hub-and-spoke" concept came into being.  Airlines
utilize smaller aircraft, such as the B-737, to consolidate
aircraft passenger loads before continuing on to final
destinations.  As a result, the number of long-range
aircraft available for the CRAF has decreased during the
1980's.  Although orders for larger aircraft have increased
recently, other corporate strategies have had a negative
impact on the CRAF airlift capability.
     An increasing number of airline mergers and changes in
tax laws have markedly altered aircraft ownership and
purchasing decisions of the airlines.  Carriers are
increasingly finding that short-term leasing of aircraft is
a very viable alternative to ownership.  Currently, thirty
percent of the U.S. commercial fleet is leased, and this
figure could increase to 60-70 percent during the 1990's.
(11:35)  The reasons for this are apparent.  It gives much
greater flexibility to the airlines to respond to changes in
the market.  They can decrease or increase their fleet size
in a relatively short period of time if conditions warrant.
While leasing aircraft is economical for the carriers, it is
not advantageous to the CRAF and our nation's strategic
airlift capability.
     A number of the major aircraft leasing agencies are
owned by foreign investors, the largest of which is an Irish
firm called GPA Group Ltd. (5:42)  Since foreign-owned
aircraft are excluded from participating in the CRAF, this
trend in ownership has had a negative effect on our nations
strategic airlift capability.  Since the NDFP requires
aircraft to remain in the CRAF for a number of years to make
the investment worthwhile and provide stability, many of
these leased aircraft are not eligible for this program.
Airline deregulation and its impact has affected the
passenger and cargo segments of the CRAF differently.
     The passenger airlift requirement established by the
DOD can be achieved with the existing CRAF aircraft and any
changes in the types of aircraft purchased in the future
should not impact that capability. (15)  A positive step in
that direction was the certification of the B-757 and B-767
for extended overwater flights.  These are two of the new
two-engine widebody aircraft that the airlines are
transitioning to for their future operations.
Unfortunately, the cargo airlift shortfall is becoming more
critical for many of the reasons already discussed.  There
are several possible solutions which would increase the
current strategic cargo capability.
     The military solution to this shortfall has been the
ongoing development of a new generation of airlift
aircraft - the C-17.  It is designed to carry a payload of
up to 167,000 pounds for 2,400 nautical miles and land on a
3000 foot airfield. (14:16)   One of the primary advantages
of the C-17 over our current airlift force will be its
direct delivery capability.  Brigadier General Butchko Jr.,
C-17 system program director, stated in an August 1989
interview that:
     The airplane will fly directly to a rear brigade
     area, about 15 kilometers behind the front lines.
     Today we would probably take two C-141's and
     deliver cargo to a main operating base, then use
     four C-130's to ferry the load near the front.
     One C-17 would do the job of all six planes.
     The future benefit of this airlift capability is
obvious.  With the planned production of 210 C-17's, the
increase in capability will be over 27 MTM/day. (15)
Unfortunately, with shrinking defense budgets, the C-17
procurement may be reduced or even canceled. (1)  The
prospect of this places greater emphasis on the role of the
CRAF.
     I have already illustrated that airline interests and
defense interests do not necessarily coincide.  Since the
Airline Deregulation Act of 1979 made no mention of national
defense, there was no incentive or control provided for the
airlines to make management decisions with regard to DOD
strategic airlift concerns.  Rather than react to future
environmental and economic conditions, the government should
take a more proactive role in seeking solutions to this
critical issue.
     One possible civilian solution would be to legislate
the joint development of an aircraft for use by both the DOD
and civilian airlines.  Because of the long lead time
required for aircraft development, this proposal would be a
long-range solution.  Also, airline resistance would likely
prevent this type of legislation because many design
features required for a military aircraft would probably not
be desirabe for civilian use.
     Another, more feasible solution, would be to enhance
all future long-range aircraft before they come off the
assembly line.  These would be easily convertible from
passenger to cargo aircraft.  This could be accomplished
through legislation or direct financial incentives to the
airlines.  Attempts to influence the airlines to modify
their future aircraft, however, may not be successful.
     Even though the airlines are reimbursed for the
inconvenience and increased operating costs, operational
considerations could prevent them from participating in this
type of program.  The modifications increase the weight of
the aircraft and therefore decrease its operational range.
In some instances this could result in an additional fuel
stop on long overwater flights, thus making the airline less
competitive with another airline's non-stop service.   In a
free-market system, this obstacle can only be overcome by
increased financial incentives or direct involvement by the
government.  Even though these solutions would be expensive,
some course of action should be taken to reverse current
trends.
     Prior to airline deregulation, the airlines operated
aircraft which supported DOD objectives through
participation in the CRAF.  Long-range, widebody aircraft,
such as the B-747, were increasing in numbers and their
large cargo capacity directly contributed to a healthy
strategic airlift capability for our nation.  The years
following deregulation, however, have been extremely
turbulent for both the airlines and the CRAF.  Airline
marketing decisions began to adversely affect the CRAF
capability.  They invested in smaller aircraft and began
leasing instead of owning aircraft.  Fewer aircraft in the
CRAF has resulted in a decrease in our nation's airlift
capability and our ability to support a major contingency.
The U.S. must develop policies which reverse this trend.
The continued development of a new military airlift aircraft
and legislation to increase airline participation in the
CRAF are essential to our nation's continued capability to
project power and respond to a crisis anywhere in the world.
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