The Air Force says it needs 102 more C-17 transport planes than those already ordered from Boeing Co. so it can meet combat and humanitarian-mission needs.
The Defense Department initially agreed to buy 120 C-17s. In December it said it would ask Congress to increase that by 60 planes in a contract valued at as much as $10 billion, which would keep Boeing's Long Beach production line operating through 2007. Gen. John Handy, commander of the U.S. Transportation Command, said that an additional 42 planes will be needed, giving the Air Force a fleet of 222 planes.
The U.S. military views Asia as a more likely military theater for the U.S. than Europe, Handy said, increasing the need for long-range transport aircraft such as the C-17. The large planes can carry heavy equipment directly from the U.S. and land on primitive airfields. The operation in Afghanistan has reinforced that notion, Handy said.
"I'm fairly convinced, looking at Afghanistan, that we have a tremendous challenge on the air side--every single ounce of what has gone into Afghanistan has gone in by air," Handy said in an interview during the Air Force Assn.'s annual tactical warfare symposium in Orlando, Fla.
Chicago-based Boeing is aware of Handy's estimate and is in talks with the Air Force, said Daniel Page, Boeing's director of C-17 market development.
A contract for 102 additional transports instead of 60 could be valued at as much as $15 billion and extend production at the Long Beach assembly line to 2011, Page said. Boeing has said it may close the C-17 production line by 2004 unless more planes were ordered beyond the 120 in the pipeline. About 8,000 people are employed on the C-17 program.
The planes included in the contract for 60 C-17s were offered at $152 million each in 1999 dollars, compared with the current average of $198 million, Page said.
The C-17 has shown in Afghanistan its ability to land on a short, unimproved runway. C-17s flew 43 missions into Camp Rhino, the Marine Corps base southeast of Kandahar, delivering 1,450 tons of heavy equipment, including graders, earthmovers and bulldozers, as well as 419 passengers. Camp Rhino "was a perfect example" of what a C-17 can do that other large Air Force transports can't, Handy said.
Boeing shares rose 18 cents to close at $44.94 on the New York Stock Exchange. They have fallen 27% in the last year.