Boeing Looks To Plug Gaps In C-17 Production

(AviationWeek) : Boeing remains confident of bolstering its C-17 backlog with additional international sales on top of the expected order from India, despite the challenges of maintaining unit cost in the face of reduced production rates, possible gaps in the delivery stream and no new U.S. Air Force orders.
Although the company is in the midst of a planned drawdown of production from 15 to 10 per year, “the goal is to maintain the same price,” says Tommy Dunehew, C-17 business development vice president. Despite this being a challenging target, additional international business should help to balance the books and fill potential gaps as the company looks to stabilize at the reduced rate in 2012, Dunehew adds.
Boeing says the Indian government is “going through the final steps” toward confirming its order for 10 aircraft, with the first expected to be delivered at the end of 2012. Part of the issue with the order has always been how to maintain the Long Beach assembly line while meeting the Indian air force’s stretched-out delivery requirements of five aircraft per year, with deliveries at roughly two-month intervals. “We’re out there looking for customers to fill those gaps, and we have another couple of them out there,” Dunehew says. “It’s looking pretty good.”
Based on the existing production profile, and depending on the outcome of talks over other customer deliveries planned for next year, the U.S. Air Force is set to receive its final C-17 in September 2012. Overall, Boeing is under contract to deliver 223 to the Air Force, of which 210 have so far been handed over. The initial availability of slots on the production line for new orders means Boeing could release aircraft for delivery “in about a year or so from now for an existing customer,” or in 2013 if it’s a “brand new” customer, Dunehew says.
Aside from India, additional international C-17 orders are on the cards from Kuwait, which has a letter of request for a single aircraft announced last September, plus an additional two held as options by Qatar. “Interest in Southeast Asia is growing, and there’s more in the Middle East,” says Mark Kronenberg, Boeing vice president of international business development. Based on the supplementary purchases by Australia and the U.K., two of the three original “ABC” international customers along with Canada, he adds, “I’d not rule out any more of the ABCs acquiring extra aircraft.”
Boeing commented on future prospects for additional sales as the United Arab Emirates took delivery of the first of six C-17s on May 10. The UAE will receive three more C-17s during 2011, and two in 2012. The latest aircraft will become the 232nd C-17 in service and the 22nd to be delivered to an international customer. Other overseas deliveries set for this year include a fifth C-17 to Australia.
Excluding pending orders from India, Kuwait and others, the remaining backlog now stands at 21. This represents around two year’s worth of production at the new rate.