Boeing Sells C-17 to Australia, Stretches Production

 - June 6, 2011, 5:05 AM
Boeing delivered the first of six C-17s to UAE in recent weeks, one of 21 delivered to international customers. (Photo: Boeing)

Boeing sold a fifth C-17 airlifter to Australia and delivered the first of six aircraft to the UAE in recent weeks. The Australian aircraft will be diverted from remaining U.S. Air Force production, to enable an August delivery this year.

Twenty-one C-17s have now been delivered to international customers, but Boeing needs more export business to sustain an economic production rate at Long Beach, Calif., in the absence of further U.S. Air Force orders. The company has set a minimum economic rate of 10 per annum, down from 15 at the height of domestic demand.

The contract for 10 C-17s from India is expected to be finalized soon, which will increase the production backlog to 28. This includes the 12 remaining U.S. Air Force aircraft. Boeing also is expecting an order for one C-17 from Kuwait. 

The high acquisition cost of the big airlifter is somewhat mitigated by the C-17 “sustainment partnership” Boeing has created for customers. According to the company, this is a performance-based logistics scheme that delivers spares, support equipment, tech orders, sustaining engineering and on-site field teams, to ensure high levels of mission readiness.

If the C-17 does go out of production, the international market for widebody strategic airlift will effectively fall to the Airbus Military A400M. The European company is counting on export orders to turn what has become an unprofitable program, thanks to development delays, into a long-term success. But its potential price advantage over the larger Boeing product has been eroded by the export levy scheme whereby it must repay a $2 billion (€1.4 billion) loan from the launch partner nations.