Examination of Witneeses (Questions 40-59)
AIR VICE-MARSHAL
KEVIN LEESON,
BRIGADIER JEFF
MASON AND
AIR COMMODORE
ANTHONY (TONY)
GUNBY
24 APRIL 2007
Q40 Mr Hancock: What was behind the
decision to swap from leasing them to purchasing them? Did our
usage of them have any relevance to that?
Air Vice-Marshal Leeson: No. It
was always to be looked at as the most cost-effective way of operating
these aeroplanes. I believe that at the time of the Strategic
Defence Review which identified the need for additional outsize
airlift, there were still uncertainties over the then future large
aircraft contract which subsequently became the A400M procurement.
We were not quite sure where that would actually end up. When
SDR was authored we were nowhere near the tempo that we have been
experiencing in the intervening period. As we do with all capabilities,
we keep these things under constant review. I believe that in
about 2002 we looked again at the likely volumes required in the
outside airlift sector by which time the A400M programme had been
determined insofar as how many aeroplanes we would be buying.
It became clear that a review was then needed of our overall lift
position with the C-17s. The decision was that it was more cost-effective
to own rather than continue to lease.
Q41 Mr Hancock: So, we were not under
pressure from Boeing to buy these because otherwise the caveats
in the lease would have made it more difficult for us to continue
to operate them?
Air Vice-Marshal Leeson: Not at
all. Boeing have been splendid contractors in regard to listening
to our real requirements and making sure they deliver as best
they can towards them. It was very much an internal decision that
we wanted to maintain ownership of these items.
Q42 Mr Hancock: Do we now own them?
Air Commodore Gunby: We will progressively
take over the title deeds, if you will, of the aircraft so that
next year at specified periods they will transfer piecemeal over
to the MoD accounts.
Q43 Mr Hancock: Was that at the end
of the original leasing period?
Air Commodore Gunby: That is correct.
Q44 Mr Hancock: You did not pay a
penalty?
Air Commodore Gunby: No. The original
lease was for a seven-year period, which at that time was termed
the short-term strategic air lift requirements—the STSA—and,
as the air vice-marshal has indicated, we have subsequently reviewed
the situation and think we need these aircraft on our own books.
We shall do that next year. At the same time if that comes with
the delivery of the fifth aircraft all five aircraft will ultimately
be of the same specification and will meet a very rigorous design
standard.
Q45 Mr Jenkins: I am glad that they
perform well and we have the fifth one coming into place. There
is something going round in my head. If it is such a great aircraft
and we have an older decaying air lift capacity and know we want
the A400 but it is being pushed back and back, and if we know
we have the present operation with the C-17, do we have enough
C-17s at the present tempo to fill the gap between now and when
the A400 comes in, if ever? Do we need seriously to consider putting
in for the purchase of another C-17, if not more?
Air Vice-Marshal Leeson: As far
as I am concerned the A400 programme is static; it is not slipping.
We have no indication that there is anything tangible out there
that causes a problem.
Q46 Mr Jenkins: Who is building this?
Air Vice-Marshal Leeson: It is
the Airbus military company which is part of the EADS organisation.
Q47 Chairman: We shall come to deal
with that in a moment.
Air Vice-Marshal Leeson: To some
extent I was going to use my get-out-of-jail-free card. In terms
of dealing with that element of the programme my good friend General
Figgures will deal with that when he comes before you in a few
weeks' time.
Q48 Mr Jenkins: Do we need another
C-17?
Air Vice-Marshal Leeson: If I
may drift back to the present position, over the past 18 months
there has been an increasing number of troops deployed and therefore
the sustainment package and everything else that goes with it
has progressively moved upwards. We keep that under constant watch
to decide what it is we need to do. For example, the decision
last year to go to five C-17s was very much based on what we were
charting ourselves forward to do. We have a large reliance on
the commercial sector to provide freight and people lift and I
must say that I am becoming increasingly nervous as to whether,
looking at the marketplace and the risk to aeroplanes, we got
the balance quite right. There is now an extensive piece of work
going on to repeat the review of the middle of last year of the
volumes that we predict will be moved around over the next 12
months and assess that number again.
Q49 Mr Jenkins: Is that a yes or
a no?
Air Vice-Marshal Leeson: At the
moment we are delivering well beyond our planning assumptions
and, as the CDS mentioned, that itself is not necessarily an issue.
It means that one has configured a programme for a situation that
is now being exceeded. That therefore causes a number of stresses
and stretches in the programme. There is no doubt that the outsize
air lift sector and secure passenger lift sector of my owned base
is the most stressed. As the logistics deliverer I would certainly
wish to improve on that, but we have to find ways to deliver it
in the relevant timescales against what the conditions will be
at that time. That piece of work is going on.
Q50 Mr Jenkins: Obviously, you have
more information and knowledge about the present situation than
the Committee. In your opinion do we need another C-17—yes
or no?
Air Vice-Marshal Leeson: I am
sorry; it is not a simple yes or no answer. At the moment, by
prioritisation and use of the chartered sector we can deliver
sufficient support to where we are. Therefore, there is a need
for analysis of the risks faced in future and the cost-effectiveness
of the operation and whether or not one has the balance right.
That piece of work is going on at the moment, so I would not like
to prejudge its conclusion.
Q51 Chairman: But you say that you
are becoming increasingly worried about those risks?
Air Vice-Marshal Leeson: I am
concerned that we carry a greater risk.
Q52 Mr Jenkins: Boeing told us that
it intended to shut down production in 2009. It takes three years
to build one of these aircraft, so we have already passed the
deadline. Therefore, if we need to order another we will have
to buy a used one. If we need these aircraft someone should face
up to it and say that we cannot take the risk, the gap is there,
the present aircraft are being worked to maximum capacity and
to fill that gap another C-17 is needed. That is what I am asking.
Air Vice-Marshal Leeson: Boeing's
closure date for the line has gone back very slightly after a
recent reorder by Congress, so there is no longer the need to
have a decision tomorrow morning, as it were. We have time to
make sure that we have the right answer here. Clearly, there is
a complex dynamic between the A400 balance, the C-130J balance,
the commercial balance and the C-17 which is why we must get that
answer right. As I say, that work is in hand at the moment. We
are not time-pressed by Boeing to make that decision this week.
Q53 Mr Jenkins: What weight can a
C-17 carry?
Air Vice-Marshal Leeson: It depends
on the range that one wishes to achieve. Clearly, the more one
loads it the lower the range, but it is our longest haul and biggest
freight aeroplane.
Q54 Mr Jones: I understand that work
is going on at the moment to assess whether or not another C-17
is needed. Is there an option to do what we did earlier on in
terms of leasing a C-17 rather than buying one off the production
line? Would that option be open to us if we decided that we needed
one?
Air Vice-Marshal Leeson: Again,
that is a matter for General Figgures in terms of the exact detail
of where the work at the moment is going on. The original calculations
to buy out the lease under the original terms of the lease made
financial sense at that stage. Given the fact that we decided
last year to buy the fifth one because we would want it for a
long time I suspect that the same answer would apply when work
is done on how best to achieve whatever de-risking we deem necessary.
Q55 Mr Jones: When we were at NATO
a few weeks ago there was talk about acquiring heavy lift simply
for NATO's purposes. Is that being taken into consideration in
the work on what we need?
Air Vice-Marshal Leeson: It has.
We have worked very closely with our colleagues in Brussels on
their proposal. First, they wish the UK to join in that proposal
because clearly as a pretty large player in moving stuff around
any offtake that we would have had would look quite attractive
in that respect. We did some initial work on whether or not shared
ownership or a shared lease with a bunch of other nations would
work and it did not look right to us. We were sufficiently confident
that in terms of our ability to assess volumes and cost the UK
did not need another half or quarter of an aeroplane's lifting
capacity; it would be a rather bigger package than that, and therefore
there was minimum advantage to us in entering into that, albeit
at the time we were alive to the fact that encouraging constructive
good behaviour in new capability in Europe is always something
to which we would wish to have an eye. We certainly offered to
work with them very closely. In terms of what NATO colleagues
are looking at and the cost-effective way in which they might
operate their aeroplanes, for example by add-ons to our maintenance
contract with Boeing, such that they could achieve a cost-effective
answer which would also have advantages to us, we are still working
that through with NATO at the moment, but we will not participate
in that programme other than to assist.
Q56 Mr Jones: You have already referred
to the A400M. Estimates are that the in-service date has slipped
by 15 months. Can you give an update on where we are at with this
programme?
Air Vice-Marshal Leeson: I prefer
to take a bye and say that that really needs to be answered by
General Figgures as that is not strictly my area.
Q57 Mr Jones: Perhaps I may ask a
related question which may be your area. As to the knock-on effect
of any delay in terms of taking the C-130Ks out of service, in
terms of capability what assessment has been made of the possible
need to extend the life of those aircraft?
Air Vice-Marshal Leeson: In the
previous planning round we took steps to do some life extensions
on a certain number of airframes to deal with the current programme
as is known. There is a little more space to do a bit more, but
not very much. Therefore, C-130K availability will become a problem
if the A400 programme slips any further.
Q58 Mr Jones: What timescales are
you looking at? At what point does the decision become crucial?
Air Vice-Marshal Leeson: We already
face a modest but containable gap, so it is already with us.
Air Commodore Gunby: It is currently
planned that the C-130K will go out of service after the introduction
of the first A400Ms, and the C-130J will continue in service until
2030, so there is still a significant amount of air lift during
that transitionary period, not all of which is currently employed
on operations. There is a little bit of a header there to provide
for some contingency.
Q59 Mr Jones: What happens if we
have a situation whereby there is further delay of the A400M?
For example, in its submission Marshalls Aerospace has told us,
for understandable reasons, that it is seriously concerned about
the retirement of the C-130Ks ahead of the entry of the A400M.
Will we have to bring in something to fill that gap, or can you
extend the life of the C-130Ks?
Air Vice-Marshal Leeson: More
work can be done on the C-130K. The issue becomes whether or not
it is a cost-effective thing to do. Given the style of aeroplane,
you can extend it for ever if you are prepared to continue to
replace the outer wings and the centre sections which is the area
where we face difficulty with the C-130K. The work that we did
last year has got us back into broad balance with any quantitative
difficulties because of FSTA programmes and the freight capacity
that is new and available as part of FSTA. It can carry a significant
amount of freight below the floor as well as passengers above
it. At present we have a programme that works. If any further
slippages are announced we will have to go through those numbers
again and decide what is the best answer.
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