Within the next few months, Boeing will deliver its last C-17 airlifter. This has been a remarkable program in many ways, but perhaps the most noteworthy is that the aircraft helped create a brand-new market: exported strategic transports.
Before the U.K. Royal Air Force (RAF) took delivery of four C-17s in 2001, no country outside the U.S. had ever purchased a Western military transport larger than the Shorts Belfast. A few countries, notably India and Libya, bought Soviet transports at “friendship” prices, but otherwise large airlifters were purely for the U.S. Air Force, or the USSR military. Everyone else used C-130s or smaller turboprops.
Yet two years after the RAF received its C-17s, seven NATO nations finally launched the Airbus A400M, after years of delays. While carrying less than half of the C-17’s payload, it does offer strategic range. Also, Japan decided to replace its fleet of aging C-1s—a jet built in the 1960s and less capable than a C-130—with the much larger Kawasaki C-2, now scheduled to enter service next year. Japan plans to buy 44 C-2s, which are around the size of the A400M and also offer strategic range.
Credit: U.S. Air Force
But most astonishingly, Boeing followed its four RAF C-17 sales with another 47 export aircraft. It succeeded by simply offering the C-17 at a competitive price and with a strong level of customer support—incentives that helped make strategic airlifter operations digestible for new users.
The effect of these developments on the military transport market has been profound. The non-U.S., non-Russian segment had historically been worth well under $1 billion in deliveries per year, with Lockheed Martin’s C-130J garnering the bulk of the orders. However, this year the international airlifter market will see deliveries above $6 billion, capping five solid years of record delivery numbers.
In September 2013, right after Boeing delivered the 223rd and final U.S. Air Force C-17, the company announced that the line would close in 2015, noting that another 22 would be built, including 13 on spec, with buyers to be found later. Since then, all but one of those 13 white tails have been purchased. Most recently, Qatar doubled its original aircraft order when it bought another four C-17s at this year’s Paris Air Show.
The C-17 line closure decision had to have been a tough call. On the one hand, the market’s surprising surge, reflected in the deliveries run-up over the last 10 years, offered hope that there would be more to come. Several possible strategic-lift customers have yet to make any kind of product commitment, most notably Saudi Arabia, which could have been good for 10-15 jets. There were even rumors of Algeria seriously eyeing the aircraft.
Also, there were inklings of more follow-on buys from the current user community. In August, the Indian air force said it would like at least three more C-17s; by this time only one of the available aircraft was left. And given U.S. Air Force and foreign-user requirements, there will not be any kind of market for secondhand C-17s. In all, it is virtually certain that Boeing could have sold at least a few more if it had kept the line open another six months or so.
But there were more factors weighted in favor of closing the line. By doing so, Boeing can exit its Long Beach facility, a valuable property. The final C-17 will incidentally be the last jet built in California, once a global center of aviation.
Another problem is the A400M itself. Not only is Airbus eager to sell it on export markets, but two home-market countries—Germany and Spain—plan to sell a combined 26 aircraft out of their own orders. These will likely be sold at a discount, making Boeing’s job that much harder.
The most compelling reason for the U.S. manufacturer to shutter the line was the end of the U.S. market. At first, Boeing hoped to sell C-17s abroad as a bridge to more U.S. Air Force orders, perhaps for a proposed C-17B variant. But the current USAF plan is to simply coast on the fleet of 220 C-17s (plus 51 reengined C-5Ms) for the next 25-30 years. And while international sales of C-17s were remarkable, they could never have sustained the line alone for longer than another 1-3 years.
With the C-17’s death, the international military market will have tiers. For tactical transports, options include Airbus’s C-295 and Alenia’s C-27J. For theater transports, customers can choose between the C-130J and Embraer’s new KC-390, now scheduled to enter service in late 2018. But if anyone wants a strategic airlifter, there is just the A400M, unless Kawasaki decides to export the C-2.
And if a war or other contingency results in the U.S. Air Force needing more strategic lift, without the budget or time required to develop a new replacement jet, it may find itself in the strange position of queuing up to buy A400Ms.
