Military Aircraft: Observations on the Air Force's Plan to Lease Aerial Refueling Aircraft

At 543 aircraft, the KC-135 is the mainstay of U.S. aerial refueling capability. Recapitalizing this fleet is crucial to maintaining this capability and, ultimately, maintaining the mobility of U.S. forces. In the fiscal year 2002 defense appropriations act, the Congress authorized the Air Force to lease up to 100 aerial refueling aircraft after the Air Force reported its plans to the Senate and House Armed Services Committees and Defense Appropriations Subcommittees. The Air Force sent Congress on July 10 its report containing a business case analysis of its proposed lease. The Air Force plans to lease 100 KC-767A aircraft for 6 years each from a special purpose entity (SPE) that will order the aircraft from the Boeing Company. GAO was asked to (1) summarize the Air Force's report for leasing KC-767A aircraft, (2) present its observations on the report and justification for the lease, and (3) identify related issues and costs to assist the Congress as it considers the Air Force's proposal.