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In Detail —— Strategic Airlift Boeing C-17 and Antonov An-124-100 : a comparison ——

by  Herman A. Kurapov MA MBA

Strategic Airlifters

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Strategic Airlift Capability  –  Procurement  –  February 2006 Strategic Airlifters: a Comprehensive Comparison between the Boeing C-17 and the Antonov An-124-100   [Part 4] Herman A. Kurapov,  Candidate,  Master of Engineering in Logistics, MIT [ 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.] The US Civil Reserve Air Fleet (CRAF) Concept  –  a Flexible Operating Model An efficient and innovative concept for increasing airlift capability already exists  –  the Civil Reserve Air Fleet (CRAF) which is a part of the US National Airlift System (NAS consisting of both military and civilian airlift assets). The CRAF concept is straightforward  – it is simply a method of mobilizing the airlift potential represented by the large numbers of aircraft operated by American civilian air carriers. Selected large aircraft from US airlines are contractually committed to  CRAF  and support  Department  of  Defense  (DOD)  airlift  requirements  in  emergencies  – that is,  whenever  the  need  for airlift exceeds  the  capability  of  military  aircraft. In turn, CRAF participants receive preference in  bidding  on  US  government  air transportation business. CRAF can provide as much as  40% of the US  military’s capacity  to  airlift  cargo meaning that the DOD doesn’t need to purchase additional aircraft itself or incur the cost of operating them during peacetime. This allows the USAF Air  Mobility Command to focus on C-17 procurement and a C-141 SLEP Life Extension project. [Ed: The weak point of CRAF is its complete lack of out-sized cargo capabilities.] Thus, US national defence interests are flexibly combined with the needs and purpose of business. In this ‘win-win’ situtation, the  US  Government  receives a cost effective and  guaranteed contingency carrying capacity while, simulateously, optimizing the US  transport infrastructure.  Defence interests are satisfied while  giving a boost  to the  United States’  international  trade and increasing the competitiveness of their national economy. Applying the CRAF Model to a Distinctly Canadian Operating Environment Developing an  all-cargo  air transport  industry in Canada would require support from the government. This is about strategic infrastructure, logistics and trade at the national level as well as defence capabilities. Strategic government backing is the reason why air cargo industries were developed  in the US and  former Soviet Union.  Both industries were started for the sake of defence (and remains partly so, in the case of the US). Now Canada has an opportunity to add a major advantage competitive edge to trade and its national economy  through a reliable air trans- port system. But, only if civilian-certified An-124- 100s were to be selected as our strategic airlifter. So what is the market for the An-124-100? Size and Segmentation of the An-124-100 Market In 2002, the global out-sized air cargo market amounts to about US$250M in annual sales (14600 flight hours flown 5300t of cargo carried). [1]  During the ’90s, the market grew 12% per year on average, compared to 5-6% growth for regular airfreight. By 2002 the business had quadrupled compared to the previous 10 years. Projections showed it reaching US $ 500M by 2010 and becoming worth US $ 2B within 30 years – but it grew even faster. By 2005, the annual An-124-100 market exceeded US $550M.  Global sales more than doubled in those three years. More than 52% of this market  (or US$ 115M per year )  is US and Canada-related (35-40% of total sales in the US market, 11-12% in Canada).  The biggest sector in the combined US/Canada An-124-100 market is aerospace industry.  [Ed: eg , the An-124-100 is the only aircraft capable of  carrying the huge, 3.43m diameter GE90 engines which power the Boeing 777 airliner.] Aerospace accounts for 60% of the global aircargo contracts (approximately US$ 38M per year, or 2700 flight hours). About US$ 25M is currently spent  annually by the Government of Canada and  Canadian businesses  for the services of  An-124-100s. Two major Canadian industries  –  aerospace and  the oil and gas industry – are very much dependent on out-sized An-124-100 services. For example, Bombardier Aerospace uses 800 hours of An-124-100 operations per annum [mostly delivering wing structures from suppliers to their assembly plant]. This averages out to mean weekly flights  –  mainly from Shorts Brothers, Belfast to Montreal but also from Kansai (Mitsubishi Heavy Industries) to Toronto. Mackenzie Delta oil and gas fields development and the Alaskan Pipeline Project will both require additional An-124-100 capacity in the future. The aircraft would be profitable in the rapidly developing outsize commercial market while simultan- eously fulfilling the Canadian Forces strategic airlift requirements. Beyond air transport’s general boost to an economy in general, there is also a so- called air transport multiplier. The multiplier represents the combined indirect and direct benefits from air transport services – generally said to equal 7.5 . That is, if An-124-100 sales in Canada generated US$ 28M a year , say, then the aggregated benefit to the Canadian economy would amount to 28 x 7.5 = US$ 210M per year. [Ed:  see Appendix A for Some Practical Details on An-124-100 Operations.] Conclusion & Summary By comparing the relevant data for the Boeing C-17 Globemaster III and Antonov An-124-100 Ruslan, we can conclude safely that  –  by performance, capacity and financial factors – the An-124-100 is dramatically superior to the C-17 as a military strategic airlifter. The An-124-100 is also a well-established civil freighter, much in demand and well-utilized by Canadian business. As a result, the big Antonov can serve two major national interests – providing both Canadian military and civilian airlift capacity and capability at the same time. The latter is desperately lacked by the Canadian air transport infrastructure and needs the immediate solution. The difference between two equipment options –  An-124-100 or C-17 –  amounts to Cdn $5.23B for only 7 years operation. Employing An-124-100s would result in Cdn $2.64B in direct cost savings plus $2.59B in additional economic benefits. [1]  This section has been revised for clarification since the original publishing.