a_majoor said:
http://www.sfu.ca/casr/mp-airlift.htm
I especially like the business model proposed. Anyone care to chip in?
As noted on CASR,
"a radical method of providing an Alternative Service Delivery â “ form a Canadian 'Airlift-for-Hire' Crown Corporation. If Government were to put out the initial capital to create such a Crown Corporation, this 'airline' could provide strategic airlift to 'friendly' countries and to the CF. By working independently of DND's budget, the Crown Corporation might actually be a profit maker. Moving the equipment outlay for this strategic airlifter from DND to a Crown Corporation may seem rather like robbing Peter to pay Paul. The key advantage is that, as a non-military entity, this corporation is free to sell its services for profit when the aircraft are not required for use by the Canadian Forces or other government departments. Costs [for setting up and initial running of the corporation] could be shared by government departments."
See also http://www.sfu.ca/casr/mp-airlift-il76-1.htm
Kirkhill said:
I am a big fan of this type of solution. For both air and sealift.
Have the government subsidize a private and/or Crown Corporation (probably Crown) to purchase 12 Airlifters (eg) and paint 4 of them Grey and have the others doing White livery work on the commercial market. Crewed and maitained by a mix of regs, reservists and civvies.
Although well intentioned, the idea of a Crown Corporation for strategic airlift was previously identified in a suggestion for C-17 operation (during a DND commissioned Options Analysis by BMCI).
It was also categorically rejected in a formal unsolicited BC-17X proposal Bid submitted in August 2003, and followed up during February 2004. Based on the following, it would not be recommended to pursue the 'Crown Corporation' line of thought.
A released Excerpt obtained from that proposal makes the following points:
Justifiable Peacetime FSA Requirements
As the 'FSA Study' notes,
"if an aircraft fleet is established to accomodate surge deployments, there will likely be excess capability during normal peacetime operations. As the focus of the 'FSA [Study]' was surge capability . . . the 'FSA [Study]' relied primarily on a study conducted by (DND's resident airlift analyst)
Mr. Pierre Fournier . . . for an indicative analysis of potential peacetime utilization. Mr Fournier examined the use of the C-17 to support the normal peacetime operations of the CF". From actual usage and Monthly Airlift Plan data
"potential C-17 missions were identified and translation from CC-130 and CC-150 to C-17 mission parameters was accomplished. The 'C-17 utilization study' analysis indicated that current peacetime operations could support a minimum of two C-17 tasking lines [operational availability necessitating a fleet size of three aircraft] with an estimated average YFR of 1900 hours (not taking into account pilot YFR requirements). . . . (As) model limitations that suggest that the C-17 usage identified in the study likely represents the lower limit of utilization" it can realistically be assumed that peacetime airlift requirements could utilize up to 4 C-17s (or 4 BC-17Xs) to support 3 lines of tasking. 'Annex A' - prepared by HLB Decision Economics -
to BMCI's 'OA' (Options Analysis)
report confirms "the (C-17) peacetime requirement equates to 2 lines of tasking, with the occasional 3rd line as an overtask. (This is broken down into) a total of approximately 3,000 hours per year dedicated to CF airlift, and an allowance for 200 hours of non-collateral pilot proficiency training."
Realistic FSA capacity
The FSA
'OA' extrapolates that
the "basic annual airlift requirement that could reasonably be assigned to the aircraft" is 3,108 hours - 3,200 per 'OA Annex A', split among the 4 FSA that CF could reasonably employ during peacetime, giving a notional fleet YFR of 3,500 hours or 875 hours per CF 'militarized' BC-17X FSA. This is derived from eight crew requiring a proficiency YFR of 3,072 hours, rounded up for unforeseen surge airlift requirements (which allows for a ninth crew) and weighted 73% against UK's C-17 use - which with a much larger military has respectively greater outsize airlift requirements for it's larger military commitments. Additionally, this frees up CF aircrews and maintenance personnel to help alleviate critical personnel shortages elsewhere as recently noted by the Senate Defence Committee. Considering DND's 'fiscally constrained' operational posture which has resulted in numerous reductions in aircraft fleet YFR's, to provide funds required for upgrades and operations, 3,500 hours would seem a reasonable YFR.
Any supplemental surge capability - in addition to the
4 CF FSA BC-17X required for basic annual airlift requirements -
would be provided by Commercial BC-17Xs chartered from start-up outsize/oversize Air Cargo Canadian Commercial Consortium BC-17X only when required. This realizes DND a minimum potential savings of over C$700M in Capital Procurement acquisition costs vs the cancelled FSA projects previously planned 6 C-17s.
FSA SOA marketing
The FSA 'OA' noted that 6 C-17 are required to meet the SOR surge deployment requirement while
"the number of aircraft further dictate the number of aircrews that must be kept proficient and available at two crews per aircraft. To maintain proficiency each crew must fly a minimum of 32 hours per month . . . (resulting)
in a required annual flying rate (YFR) of 4,608 hours for the (6) C-17. The analysis has also demonstrated that these numbers exceed the basic annual airlift requirement that could reasonably be assigned to the aircraft by approximately 1,500 hours" for a realistic YFR of 3,108 hours.
The December 2001 ADM(Mat) Briefing Note lists a "YFR 1000 hours per aircraft" for 6,000 hours total, which exceeds the basic annual airlift requirement by some 2,892 hours.
The FSA
'OA' spuriously concludes the YFR for
6 C-17 "results in a surplus capacity that could be marketed, through a (Governmental) Special Operating Agency [SOA], to outside government agencies and commercial enterprise without competing with . . . Canadian business." In Reality, however, this flawed SOA would compete directly with existing (and future potential) Canadian business such as: 'Skylink aviation'; 'Ridgeway North America'; 'C2 Logistics Incorporated'; and 'BAX Global' which are excellent examples of existing Canadian businesses that contract for outsize/oversize airlift charter within the Canadian marketplace.
The FSA
'OA' notes "
there would be minimal operating costs against this revenue, since the hours must be flown for crew proficiency anyway."
BMCI's flawed premise of a SOA did not account for crew costs, which new or existing Canadian business's - including those that charter airlift from an outside CIS 3rd party - must account for in their pricing,
and would result in a subsidized government air cargo SOA that has an unfair advantage on the open market. Canadian SOA's are normally set up to assist Canadian business, with . . . an excellent SOA example,
not to compete with or inhibit Canadian business. Government should never be in open competition, on a subsidized basis, against established or potential business as this goes against the whole premise of a free market economy and could have resulted in potential lawsuits and legal challenges from numerous venues, potentially including the EHLG (European Heavy Lift Group) and WTO (World Trade Organization), plus the above noted 3rd party Canadian charterers, due to unfair business practices.
BMCI's idea of the SOA was based on four flawed premises noted in the OA under Revenue Generation:
1. - Only two charter carriers in oversize airlift business.
[Besides Ukraine's 'Antonov Airlines' (8 An-124-100M Ruslan & 1 An-225 Miya, plus 1 An-22 turboprop) marketed through UK's AirFoyle/Heavylift joint venture and Russia's 'Volga-Dnepr Airlines' (9 An-124-100M plus 1 An-124-100M construction on-hold & 1 An-124 Condor plus 2 An-124 in storage), additionally: 'AirFoyle/Heavylift' (1 An-124-100M previously owned by Volga-Dnepr) and long-established 'Polet Airlines' (1 An-124-100M plus 1 An-124-100M building & 3 An-124 plus 3 An-124 in storage - incl. 1/1 An-124 leased to Russian Defence Ministry) in Russia - all heavily utilized for OP ATHENA. Also, 'Libyan Arab Air Cargo' (1 An-124-100M recently entered service plus 2nd completed on hold at factory) and 'Iran Air Tours' (2 An-124-100M under construction), plus an unnamed UAE airline with An-124-100M (formerly for Russia's 'Atlant-Souz' from late-2003 (who may still receive up-to 5 ex-Russian AF unmodernized An-124 being loaned 'gratis') until purchase funding fell through).
Total in service: 1 An-225, 21 An-124-100M (plus 5 on-hold or building) & 4 An-124.]
2. - Unlikely additional commercial carriers will emerge in the foreseeable future.
[Besides recently established 'Iran Air Tours' and 'Libyan Air Cargo', additional emergent potential outsize/oversize carriers: BMCI completely misses well-known fact that CAMAA may provide 10-14 BC-17X operated by one or more US air cargo companies from 2008, or later, as part of the CRAF. France's . . . - who specialize in facilitation of French military deployments through 3rd party charter - have expressed interest in the BC-17X (5 or more) due to unsuitability of An-124, AirFoyle/Heavylift has also expressed BC-17X interest, while Volga Dnepr's VP Konstantine Vekchine affirms
"we think there is room for both" BC-17X and An-225, plus start-up outsize/oversize Air Cargo Canadian Commercial Consortium w\4 BC-17X. A new commercial player from 2004, UAE airline w\An-124-100M (last Ruslan left on assembly line to be assembled from Ukranian Aviant factory).]
3. - "Number of organizations that are potential targets for marketing a (SOA outsize) service without interfering with Canadian commercial business enterprises. Including the United Nations, humanitarian relief organizations, arctic development organizations, and commercial enterprises such as the oil and gas industry, mining, etc."
[These are some of the exact organizations that the start-up outsize/oversize Air Cargo Canadian Commercial Consortium is targeting (not to mention BC-17X CAMAA operators and existing An-124/-225 operators), besides international corporations, proposed EU & NATO Rapid Reaction Forces, other militaries, etc.
The only Canadian or international outsize/oversize business the CF can justifiably target with any surplus capacity, on either a free 'humanitarian assistance' or purely 'cost-recovery' basis only!, is other Canadian Government Departments and agencies; foreign militaries and international governmental organizations like the UN.]
4. - Providing competitive service on the 'spot market'.
[As previously stated,
Government should never be in open competition, on a subsidized basis, against established or potential business as this goes against the whole premise of a free market economy and could result in potential lawsuits and legal challenges from numerous venues, as noted above, due to unfair business practices.]
The Consortium has absolutely no problem with the GoC buying 6 or even 12 C-17s (or 12 to 24 A400Ms) if it so desires and wishes to spend the massive $Billions that would entail, as that is GoC's perrogative as a sovereign nation. What the Consortium takes issue with is potentially buying Surplus capacity with the 'intent of selling that Surplus capacity' on the Commercial market in competition with Canadian business.
Excerpt Ends.