CASR
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In Detail |
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by Herman
A. |
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Strategic |
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Strategic Airlift Capability – Procurement
– February 2006 [ NB : for details on how Herman Kurapov arrived at his costing of An-124-100s, see: Average and Median Historic An-124-100 Acquisition / Purchase Costs.] Dispelling Myths About the Antonov An-124-100 There is a very serious misconception about the An-124-100 – namely, that it is an old, inefficient, clumsy, Soviet-built military aircraft. [Ed: the original An-124 Condor, which first flew in Dec 1982, was a military transport but it was anything but clumsy or inefficient.] In fact, the An-124-100 is a fully commercial derivative ( the world’s largest commercial air freighter ) with more than 14 years experience of intensive, global commercial operations. The civil An-124-100 was certified in 1992, a year after the supposedly super-modern Boeing C-17 first flew. [1] The An-124-100 meets all current civil standards, including ICAO Stage/ Chapter III noise limits and modern navigational equipment requirements. It has improved performance engines, Western avionics, and is equipped with VHF radios, TCAS [or Traffic alerting and Collision Avoidance System] and RNAV [aRea Navigation which computes actual aircraft position/speeds relative to a selected flight route]. The estimated service life for the An-124-100, both in terms of its operational life and in the anticipation of the obsolescence of its technology and design, is fifty years. It is projected to have at least twenty-five years of operation without any major repairs. The An-124-100 is a truly unique plane with unique capabilities – that is why it has become such an unrivalled success in the international market. As a conclusion, the An-124-100 out-performs the C-17. Much of the Antonov’s technology is on par with that of the “state-of-the-art” Boeing C-17 aircraft, lying within the strictest technological requirements of modern aviation. Financial Aspects: Acquisition versus Guaranteed Access to Capability [Ed: All figures are given in US dollars. Note that, for accounting reasons, prices for USAF C-17As are usually quoted in constant, Fiscal Year 1998 US dollars.] We will compare the costs of different acquisition models: lease, purchase, and assured chartering. Boeing C-17 Globemaster III 
How much does it actually cost to purchase or to lease a C-17? We have some historical evidence about C-17
unit costs. In 2000, the UK’s Ministry of Defence (MoD) signed a
‘lease-and-support’ agreement with Boeing and the United States Air Force for the use of
four Boeing C-17s ( three + one “active reserve” ) for the period 2001 to 2007.The price was US $750M for the lease and US $400M for support arrangements (maintenance, training, services etc). The total cost was thus US $1.15B. Based on this British precedent, a 7-year lease of six (6) C-17s for the Canadian Forces would cost at least US $1.725B [US $1.15B ÷ 4 = US $287.5M per aircraft x 6 aircraft = US $1.725B] or Cdn $2.0B. Thus, Canada would pay about $333M per aircraft in total, or $47.6M per aircraft, per year (assuming a 0.8584 exchange rate). This is, of course, if we are talking about a 7-year lease only – not the purchase price. In the case of an outright purchase, the price would be higher. According to Boeing data, USAF C-17 purchase prices range from US $175M to US $232M. [Ed: the USAF cite unit costs of FY1998 constant US $236.7M. A 2002 contract for 60 more C-17s dropped to US $161M per aircraft due to order size and cost- controlling measures. Note that the USAF costs generally do not reflect complete aircraft – the US government furnishes some C-17 components and equipment.] Antonov An-124-100 Only 2 An-124-100s are required to carry the loads of 4 C-17s, or 3 An-124-100 to carry loads equivalent to 6 C-17s. Thus, we see an economy of scale advantage. 
The purchase price for the An-124-100 is about US $25M – approximately 15% of the C-17
purchase price (at an averaged US $185M ). But, the CF will need fewer An-124s than C-17s.
So, based on cost and capacity, or a value comparison, the An-124-100 price is equivalent to
7.5% of the purchase price of a new Boeing C-17.[Ed: Boeing now seems to have fixed the C-17’s price at US $220M per aircraft .] A conventional ‘standby lease’ for one An-124-100 ( 1000 hours a year – at full standby option) is US $5M per year or 12% of the C-17 aircraft lease price. Based on the above capacity-for-value reasoning, an An-124-100 lease price amounts to only 6% of the C-17 lease price. A third option is the so-called ‘assured chartering’ or ‘partial lease’. This is based on a maximum of 500 hours per year – a more realistic upper limit to annual needs for strategic airlift by the Canadian Forces. This lease arrangement would amount to approximately US $2.5M per year, or only 3% of the C-17 lease price. [1] Ed: Design work on the C-17 (originally the C-X ) began in 1980. The concept was derived from the 1970s-vintage McDonnell Douglas YC-15 prototype airlifter. |
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