Boeing may adjust tactics in its three-year campaign to prolong manufacturing of the C-17 strategic transport. Sensing a shift in financial prospects and market demand, the company is studying the feasibility of maintaining current price levels while slashing production rates almost in half.
Boeing expects to continue building the $220 million C-17 at a rate of 15 a year until 2010, but a new order is needed next year to keep production going, and the US Air Force has no plans plan to buy more.
"My philosophy is you've got to look at the external reality, market and customer demand and then adapt," says Boeing Military Aircraft president Chris Chadwick.
"After talking to our business development folks, financial folks, and listening to the customer and what the customer is telling us is...we've got to get to a lower rate, and this is that lower rate," he says.
An internal team is studying the feasibility of reducing production to eight C-17s a year, and is scheduled to report its findings by early December.
Despite dramatically reducing annual output at the C-17 final assembly centre in Long Beach, California, Chadwick believes it will be necessary to keep pricing levels about the same. "If we do that we believe there's demand internationally, but also domestically that we can keep that production line going for a long time," Chadwick says. "It's a heck of an airplane, the customer loves it."
The USAF originally signed a contract to buy 120 aircraft, but extended that order to 180 with deliveries through 2006. Boeing has since sold 10 more aircraft to the service through funding increases imposed by Congress. Five foreign customers - Australia, Canada, Qatar, the UK and a consortium led by NATO members - have added another 18 aircraft to Boeing's orderbook.
"If you can get to three, four, [or] five international sales a year, [then] we'll have to see what the US Air Force decides to do," Chadwick says. "I think there is a sweet spot in there that says this is a national capability that we don't want to lose. It's affordable. And let's see what happens with the [Lockheed Martin] C-5s."
Congress has previously prohibited the USAF from retiring about 60 C-5As. However, Senators Joe Biden and Ted Kennedy, the two sponsors of that law, are set for new roles. Biden is now the vice-president-elect, while Kennedy plans to return to the Senate in January after surgery for brain cancer.
- See this video of a C-17's capabilities
Source: Flight International
