Page 1 GAO-02-724R Air Force Tanker Leasing

United States General Accounting Office

Washington, DC 20548

May 15, 2002

The Honorable Carl Levin

Chairman

The Honorable John Warner

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable John McCain

United States Senate

Subject: Air Force Aircraft: Preliminary Information on Air Force Tanker Leasing

In your April 10, 2002, letter, you asked us to assess the Air Force’s plan to replace a

portion of its KC-135 aerial refueling tanker fleet with leased Boeing 767 aircraft. You

asked us to assess

• aerial refueling tanker requirements;

• the cost-effectiveness of different options (lease, purchase, modify, or extend

the service life of the fleet);

• the policy for leasing major defense acquisition programs;

• the costs associated with infrastructure improvements; and

• the depot maintenance backlog.

Recognizing that the full extent of this analysis could not be done before the terms of

the lease were negotiated, you asked that we provide the preliminary results of our

efforts by May 15, 2002. We provided an oral briefing accompanied by the enclosed

slide presentation to your staff on May 2, 2002. The briefing and this letter respond to

your request for preliminary information.

In February 2002, the Air Force requested information from the Boeing Company and

from Airbus of North America on the potential for leasing tanker aircraft. The Air

Force’s request recognized that in the aftermath of the September 11, 2001, attacks on

the World Trade Center and the Pentagon, commercial aircraft manufacturers were

faced with the prospect of reduced or cancelled orders as a result of projected

declines in air passenger travel. According to the Air Force, this situation presented a

possibly unique opportunity to accelerate Air Force tanker replacement and to

address the increasingly acute challenges of maintaining the KC-135 as a viable, costeffective platform. In response to this emerging opportunity, Congress included

language in section 8159 of the fiscal year 2002 Defense Appropriations Act allowing

the Air Force to establish a multiyear pilot program for leasing Boeing 767 aircraft.
Page 2 GAO-02-724R Air Force Tanker Leasing

Congress also required the Air Force to submit a report to the congressional defense

committees, at least 30 days before lease arrangements may commence, outlining

plans for implementation; describing expected savings, if any; and comparing total

costs of leasing with the costs of purchasing.

As we discussed at the May 2 briefing, we want to emphasize that the attached

presentation provides preliminary information that is based on a short period of

work. We relied extensively on data provided by the Air Force and have not verified

most of the data. Importantly, because the Air Force is still negotiating with Boeing

over the terms, including cost, length of lease, and other issues, more current,

definitive information is not yet available. Because details of the lease are not

finalized, we were not able to carry out an independent cost analysis or reach final

conclusions on many aspects of the proposed lease. For example, to make a

meaningful cost-analysis, many assumptions would have been necessary on our part

concerning, among other aspects, lease details, aircraft basing plans, retirement

schedules for the KC-135, and potential purchase price costs and schedules. In this

regard, a preliminary report by the Congressional Budget Office (CBO), was provided

on May 7, 2002, to Senator McCain. This report, which was based on a number of

CBO assumptions since lease negotiations are still underway, concluded that a longterm lease of tanker aircraft would be significantly more expensive than a direct

purchase of such aircraft.

Despite these limitations, we were able to obtain some information on each of the

issues raised in your request. To address tanker issues and leasing proposals, the Air

Force provided briefings and data on the KC-135 fleet, a general outline of leasing

proposals, its rationale, and KC-135 depot maintenance activity. We visited Air

Mobility Command officials at Scott Air Force Base. We discussed cost-benefit

analysis and leasing issues with Office of Management and Budget and Congressional

Budget Office officials and leasing issues with Boeing representatives. We

coordinated our work with the Department of Defense Office of Inspector General.

We benefited from work we already had under way for the House Armed Services

Committee on aerial refueling tanker requirements, and we relied on our 1996 work

on tanker requirements1

 and on leasing of assets by the federal government.

Summary

The preliminary information for the five areas you requested is presented below.

Where appropriate, we raise a number of issues based on our preliminary work.

• Requirements. Although the Air Force has a long-term requirement to

replace its aging fleet of KC-135 tankers, the urgency of the need in the short

term is unclear. The Air Force states that the leasing arrangement would

allow it to acquire new tankers 3 years earlier than through its most recent

procurement plan. This would allow the Air Force to retire old, less capable

KC-135s, thus saving maintenance costs on those aircraft. According to the Air

Force, KC-135 operations have increased significantly since September 11,

with aircraft flying 45 percent more than during the same period in the

 1

U.S. General Accounting Office. U.S. Combat Airpower: Aging Refueling Aircraft Are Costly to Maintain and

Operate, GAO/NSIAD-96-160 (Washington, D.C.: Aug. 8, 1996).
Page 3 GAO-02-724R Air Force Tanker Leasing

previous year. However, tankers had not been a high Air Force priority, and

the Air Force had not planned to begin replacing the tankers until 2009. In

fact, in responding to our 1996 report, the Air Force said that with proper

maintenance and upgrades, the aircraft could be sustainable for another 35

years.

• Cost-effectiveness. Because the Air Force is still negotiating the lease

details, it could not provide information on the cost-effectiveness of leasing

aircraft instead of purchasing them. However, a key consideration in

comparing these two options is that the appropriations act requires that lease

agreements for the aircraft shall not exceed 10 years. This will leave a longterm (i.e., after the 10 year lease expires) shortfall of 100 aircraft that the Air

Force must somehow replace to sustain its tanker capacity. The cost of this

replacement could be substantial and should be a factor when comparing the

costs of leasing versus purchasing. In addition, although the act requires only

a comparison of leasing and purchasing, there are other possible options for

the Air Force to consider, such as modifications and upgrades to some existing

KC-135s.

• Policy of leasing major defense items. We have not taken a position on the

overall policy of leasing versus purchasing defense equipment; and such an

analysis would have to consider many issues in addition to cost, such as the

nature of the equipment, the criticality of the need, readiness impacts, and

industrial base issues. However, when we studied past leasing proposals, we

found that—from a cost standpoint—leasing is usually more expensive in the

long run. Our most closely related work has been on Navy proposals to lease

some ships. In three reports issued over several years,2

 we consistently

reported that leases would be more expensive than outright purchases. We

have also reported that in order to make good judgments on resource

allocation, decisionmakers need accurate comparisons of the relative longterm affects of acquisition decisions. Operating leases could obscure those

comparisons. The Air Force, as required by Section 8159, is negotiating this

lease under terms and conditions consistent with the criteria for an operating

lease as defined in OMB Circular A-11. Under an operating lease, the Air Force

would not be required to set aside funds for the full term of the lease (as it

would for a purchase). In addition, since leasing would most likely be paid

through the operation and maintenance budget, the lease would not have to

compete for procurement funding with other Air Force and defense priorities.

• Infrastructure improvement costs. Because the 767 aircraft is larger than

the KC-135, there will be some infrastructure improvement costs, such as for

building or modifying hangars, taxiways, and runway aprons. Additional costs

would likely include simulators and project management. The only available

estimate of such costs, provided by the Office of Management and Budget in

December 2001, involved one-time costs estimated at about $1.7 billion. In

 2

U.S. General Accounting Office. Build and Charter Program for Nine Tanker Ships, B-174839 (Washington,

D.C.: Aug. 15, 1973); Improved Analyses Needed to Evaluate DOD’s Proposed Long-Term Leases of Capital

Equipment , GAO/PLRD-83-84 (June 28,1983); and Defense Acquisitions: Historical Analyses of Navy Ship

Leases , GAO/NSIAD-99-125 (June 25, 1999).
Page 4 GAO-02-724R Air Force Tanker Leasing

recent discussions, Air Force officials told us that the December estimate was

outdated and probably overstated but that they could not provide more recent

estimates. They said these costs will largely depend on where the new aircraft

would be based and the condition of those facilities. Basing decisions have

not yet been made.

• Depot maintenance backlog. We have only limited information on depot

maintenance issues. The oldest models of the KC-135s are clearly expensive to

maintain and operate. Their mission capable rates are lower than those of the

rest of the fleet, and they spend increasingly long periods undergoing periodic

depot maintenance. The depots have undertaken some measures to speed up

their maintenance and repair times, but we do not know the extent to which

these actions are helping or whether other measures could be taken.

Additional Work We Will Carry Out

The Air Force is required to submit a report to the congressional defense committees,

at least 30 days before lease arrangements may commence, outlining its plans for the

lease and comparing the total costs of purchasing versus leasing. As discussed with

your staff on May 2, 2002, our future work will focus on the adequacy of the case

presented by the Air Force to either lease tanker aircraft or take another approach.

We will provide our analysis of the Air Force’s study and will examine other options

for meeting the Air Force’s needs.

We met with Air Force officials to discuss the results of our work. They subsequently

provided the letter reproduced in Enclosure II, and we have incorporated their

comments in this letter and the enclosed slide presentation where appropriate.

- - - - - - - -

We will send copies of this letter to the chairmen and ranking minority members of

the Committee on Armed Services, House of Representatives, and the Defense

Subcommittees of the Senate and House Committees on Appropriations. We will also

send a copy to the Chairman, Subcommittee on Readiness, House Committee on

Armed Services for whom we are conducting a broader body of work in this area.

This letter will also be available at no charge on the GAO Web site at

http://www.gao.gov.

We appreciate this opportunity to be of assistance. If you or your staff have any

questions regarding the briefing or this letter, please contact me at (202) 512-4914 or

William C. Meredith, Assistant Director, at (202) 512-4275. Other key contributors to

this review were Christine E. Bonham, Joseph J. Faley, Kenneth W. Newell, Kenneth

E. Patton, and Charles W. Perdue.

Neal P. Curtin, Director

Defense Capabilities and Management

Enclosures
Enclosure I

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Briefing for Senate Armed Services Committee, May 2002

1

Preliminary Information on AF

Tanker Leasing Issues

Briefing for Senate Armed Services Committee

May 2002
Enclosure I

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2

Five Areas Highlighted in Committee

Request

• Aerial refueling tanker requirements

• Cost-effectiveness of acquisition options

• Leasing arrangement

• Purchase

• Modification or service life extension of existing fleet

• Policy of leasing major defense acquisition programs

• Cost of infrastructure improvements and other

associated costs

• Depot maintenance backlog
Enclosure I

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3

Scope and Methodology

• Air Force (AF) officials provided us briefings and data

• Current KC-135 fleet statistics

• General outline of leasing proposal and AF rationale for leasing

• Depot maintenance issues

• There was not time to verify most data provided by AF

• Looked at completed and on-going GAO work related to these issues

• Had work underway for House Armed Services Committee on tanker

requirements

• Visited Air Mobility Command at Scott Air Force Base

• Met with officials of Office of Management and Budget and Congressional

Budget Office to discuss cost-benefit analysis and leasing issues

• Met with Boeing representatives

• Coordinated with Department of Defense Inspector General office
Enclosure I

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4

Scope and Methodology

Limitations

• We were unable to do independent cost analysis or

reach conclusions on many aspects of the proposed

lease, because

• Details of lease not finalized

• Basing details not finalized

• Would have to make many assumptions – lease

costs and provisions, basing plan, retirement

schedule for KC-135s, potential purchase price,

costs and schedule
Enclosure I

Page 9 GAO-02-724R Air Force Tanker Leasing

5

Tanker Requirements
Enclosure I

Page 10 GAO-02-724R Air Force Tanker Leasing

6

Requirements

AF Has 545 KC-135 Tankers

Source: Air Force Photo

E Models – 134

R Models - 411
Enclosure I

Page 11 GAO-02-724R Air Force Tanker Leasing

7

Requirements

AF Leasing Proposal

• Lease 100 Boeing 767 Tanker/Transport aircraft to replace 127 E

Models of KC-135

• Boeing has developed this Tanker/Transport version of 767 and

marketed it to militaries world-wide

• Italy and Japan have committed to acquire tanker

• Deliveries would begin to AF in FY 2006

• AF is negotiating lease arrangement so that it will conform to

legislation or will ask for legislative changes if it would make the

leasing arrangement more advantageous to the government

• Still in negotiation; details not known

• Lease amount and leasing agent

• Provisions of lease

• Maintenance arrangements
Enclosure I

Page 12 GAO-02-724R Air Force Tanker Leasing

8

Requirements

AF Reasons for Leasing Arrangement

• “Kick starts” recapitalization of tanker fleet

• Leasing arrangement allows replacement to start at least 3 years sooner than purchase and acquire 100

aircraft about 6 years sooner than purchase based

on current AF procurement plans

• KC-135 aircraft are old, need to be replaced

• KC-135E models are least capable, most in need of replacement

• Replacement would avoid future maintenance costs on KC-135Es

• Flying hours increased 45% in FY 02 compared to same

period in FY 01 (CONUS-based aircraft)
Enclosure I

Page 13 GAO-02-724R Air Force Tanker Leasing

9

Requirements

KC-135 Fleet Data

• 134 E Models in inventory as of April 2002

• All E Models are in reserve component; active AF has more

capable R Models

• First acquired – 1957

• Average age – 41 years

• AF projects lifetime flying hours limit of 36,000 hours for E

Models (39,000 for R Models)

• AF says only a few KC-135s would reach this limit before 2040

• As of 1995, majority of the fleet had between 12,000 and 14,000 flight hours

• Fleet averaging about 300 hours per year since then (CONUS-based aircraft)
Enclosure I

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10

Requirements

KC-135 Fleet Data

• Mission Capable rates (FY 02 through March)

• Active - 85%

• Reserve R Models – 77.9%

• National Guard R Models – 77.8%

• Reserve E Models – 70.4%

• National Guard E Models – 75.5%

• AF says it has not requested funds for re-engining since 1993;

Defense Department and Congress have added funds to upgrade

approximately 2 E Models per year to R Models at cost of about $29

million per aircraft

• AF estimates it will have 127 E Models to replace when leased 767s become available; according to AF, this should provide

similar refueling capacity

• AF estimates that by 2005, average number of non-available aircraft

will reach 206 of 545 KC-135s
Enclosure I

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11

Requirements

Observations on Requirements

• There is an overall tanker capacity shortfall for 2 MTW (Major

Theater Wars) strategy, but shortfall not known for new strategy

• AF does not have current study of long-term tanker needs

• Leasing would replace, not add to capacity

• Average age is high, but hours of use relatively low – Air

National Guard plans only 270 flying hours per aircraft in FY 03;

active AF plans 349 flying hours

• E Models have old engines, less capacity, higher maintenance

cost than R Models

• Kosovo and Afghanistan operations supported with current fleet,

but AF worries about increasing risk of fleet-wide grounding as

aircraft age
Enclosure I

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12

Requirements

Prior AF Plans for Replacing KC-135s

• Urgency of replacement is not clear; AF says Sept 11 increased

their concern about age of fleet

• At the time of 1996 GAO report, AF planned to begin replacing

KC-135s with new tankers in 2013

• In 2001, AF officials said start of replacement was moved up to

2009 with some “seed” money appearing in the budget

beginning in 2005

• Limited funds requested in 2002 President’s budget to study

replacements alternatives; replacement tanker was not on the

AF’s unfunded requirements list until March 2002

• If need for improved capability is urgent, quickest solution may

be to re-engine and upgrade to R Models (approx. 2 year leadtime); AF says upgrade does not address underlying issue of the

aging aircraft fleet
Enclosure I

Page 17 GAO-02-724R Air Force Tanker Leasing

13

Requirements

DOD Response to 1996 GAO Report

• Letter dated July 1, 1996, Office of the

Secretary of Defense response to draft of

GAO/NSIAD-96-160:

“...While the KC-135 is an average of 35 years

old, its airframe hours and cycles are

relatively low. With proper maintenance and

upgrades, we believe the aircraft may be

sustainable for another 35 years.”
Enclosure I

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14

Requirements

Options for KC-135E Modernization

• Re-engine and other modifications to upgrade E

Models to R Models

• AF estimates cost to be $29 million per aircraft

• Are E Models worth investing more money?

• Purchase new tanker aircraft to replace E Models

• Cost unknown (for example, Boeing web page

cites cost range for the 767 Tanker/Transport of

$150-225 million, based on quantities, features,

etc.)
Enclosure I

Page 19 GAO-02-724R Air Force Tanker Leasing

15

Requirements

Options for KC-135E Modernization

• Purchase used aircraft and convert to tankers

• Cost and availability unknown

• Contract for refueling services to replace some

organic capability

• Navy using contractor on small scale

• Not clear whether wider use of contractors is

feasible

• Lease tanker aircraft as proposed
Enclosure I

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16

Cost Effectiveness Analysis
Enclosure I

Page 21 GAO-02-724R Air Force Tanker Leasing

17

Need Detailed Data to Compare Cost

Effectiveness Options

• Data not available yet; negotiations still on-going with

Boeing

• Therefore, we have not done a cost-effectiveness

analysis; however, CBO provided an analysis to Sen.

McCain in a May 7, 2002, letter showing purchase to be

the least expensive option

• AF must report to Congress before committing to lease

• AF report required to describe the terms and conditions of proposed contracts and expected

savings, if any, compared to purchase

• AF can proceed with lease after Congress has its report for at least 30 days
Enclosure I

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18

Requirements

Sec. 8159 Changed Required Report

• Exempts AF from 10 U.S.C. 2401 and 2401a

• Sec. 2401 generally requires Secretary of a military department

to notify Congress of a lease of an aircraft or vessel with a term

5 years or longer

• Sec. 2401 also requires DOD to provide a detailed description of

the terms of the lease and to justify entering into the lease rather

than a contract to purchase the aircraft or vessel

• Sec. 2401a requires a written determination that a lease of

vehicles, equipment, vessels, or aircraft for longer than 18

months is in the best interest of the Government

• Section 8159, on the other hand, requires a report describing the

terms and conditions of proposed leasing contracts and

expected savings, if any, compared to purchase
Enclosure I

Page 23 GAO-02-724R Air Force Tanker Leasing

19

Cost Effectiveness

Key Cost Considerations

• Independent analysis by GAO not possible without details of

lease arrangement, but there are several key considerations in

cost effectiveness analysis:

• How are 100 leased aircraft replaced at expiration, since AF has

long-term need for aerial refueling tankers?

• Will have to be re-leased, purchased at residual value, or replaced with new aircraft

• How is that cost estimated?

• Without replacing leased aircraft, impact on tanker fleet is considerable

• Chart on next slide illustrates that tanker fleet would shrink

starting in 2015 as leased tankers are returned, unless AF

takes further action
Enclosure I

Page 24 GAO-02-724R Air Force Tanker Leasing

20

Impact on AF Tanker Fleet When 767s

Are Returned at End of Lease Period

0

100

200

300

400

500

600

700

2005

2006200720082009

2010201120122013

2014

2015

2016201720182019202020212022

B-767

KC-135

KC-10

Shortfall as leases expire starting in 2015

Based on notional 767 leasing

plan and KC-135E retirement

plan; no AF plan available

E Models are retired as 767s

are delivered
Enclosure I

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21

Cost Effectiveness

Additional Cost Considerations

• What is useful life of a 767 Tanker?

• Current tanker fleet used for 40+ years

• What does AF use as purchase cost for comparison?

• Boeing information indicates purchase price of $150 to

$225 million

• Price used would greatly impact comparison

• Converting E Models to R Models (which AF says is

feasible for about 100 of the 127 aircraft) at $29 million per

aircraft could probably be accomplished sooner than

leasing aircraft

• Sec. 8159 does not require AF to consider this option
Enclosure I

Page 26 GAO-02-724R Air Force Tanker Leasing

22

Cost Effectiveness

Some Cost Data

• OMB analysis based on December 2001 data from

AF

• Total cost over life of program estimated at $26

billion in “then-year” dollars, not present value

• About $1.7 billion of that amount would be incurred

whether purchase or lease (infrastructure, etc.)

• AF says these figures are outdated and overstated,

but it will not have more current data until negotiations

and its analysis are done
Enclosure I

Page 27 GAO-02-724R Air Force Tanker Leasing

23

Cost Effectiveness

Benefits to Consider

• Cost avoidance – difference between 767 operation

and support costs and KC-135E projected costs

• No AF estimate available

• Applies to lease or purchase

• Having more capable tankers in the fleet sooner

• Mission Capable rates would likely be higher

• E Models replaced about 3-6 years sooner than

purchase, within current budget projections

• 767s would have ability to refuel AF, Navy, and

allied aircraft on same mission
Enclosure I

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24

Policy of Leasing Major

Equipment Items
Enclosure I

Page 29 GAO-02-724R Air Force Tanker Leasing

25

Policy

Some Policy Considerations For Leasing

• GAO has not taken a position on the policy of leasing

defense major acquisitions

• We have looked at several proposals by the Navy to lease

auxiliary ships or acquire them with "incremental" funding

• In these Navy ship cases, we found leasing more

expensive than purchase when there was a long-term

need for the asset

• In addition to costs, there are other issues that would have to

be considered in assessing policy (see next slide)
Enclosure I

Page 30 GAO-02-724R Air Force Tanker Leasing

26

Policy

Other Issues In Leasing Defense Assets

• In addition to cost, there are many considerations

involved in policy of leasing major defense equipment,

such as:

• Nature of equipment

• Criticality of need

• Timing and duration of need

• Operational and readiness issues

• Industrial base issues
Enclosure I

Page 31 GAO-02-724R Air Force Tanker Leasing

27

Policy

Criteria for Operating Leases

• OMB has specified budget scorekeeping criteria

for using operating leases (see next slide)

• Appropriations Act Sec. 8159, which establishes

the leasing program, laid out requirements

which are consistent with OMB criteria

• OMB will have to decide whether AF leasing

agreement with Boeing meets the criteria
Enclosure I

Page 32 GAO-02-724R Air Force Tanker Leasing

28

OMB Criteria for Operating Lease

• Ownership of the asset remains with the lessor during the

lease period, and is not transferred to the government at or

shortly after the end of the lease period

• Lease does not contain a bargain-price purchase option

• Lease term does not exceed 75 percent of the estimated

economic lifetime of the asset

• Present value of the minimum lease payments over the life of

the lease does not exceed 90 percent of the fair market value

of the asset at inception

• Asset is a general purpose asset rather than being for a

special purpose of the government and is not built to unique

specification for the Government as lessee

• There is a private sector market for the asset
Enclosure I

Page 33 GAO-02-724R Air Force Tanker Leasing

29

Policy

DOD Leasing Review Panel

• Established November 2001; headed jointly by

Undersecretary for Acquisition and Comptroller

• Reportedly, Panel was established to act like the Defense

Acquisition Board (DAB) on leasing proposals

• AF has met with Panel representatives to discuss leasing

proposal

• AF must present its decision and supporting study to Panel

before going forward

• We were told the only leases now under consideration are

for Boeing 767s and 737s (737s were included in same

provision of Appropriation Act)
Enclosure I

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30

Associated Costs
Enclosure I

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31

Associated Costs

Not Much Data Available Yet

• Specifics on infrastructure costs depend on AF basing

plans, which AF has not completed

• Only source is OMB December 2001 estimate

• Military Construction - $1.1 billion

• Other Costs (spare parts, simulators, and program

management costs) - $610 million

• These costs would be incurred for lease or purchase,

but not for modification of current fleet
Enclosure I

Page 36 GAO-02-724R Air Force Tanker Leasing

32

Associated Costs

Other Potential Associated Costs

• Other costs that AF says it is considering in its

analysis:

• Training – no estimate currently available

• Personnel – AF says 767 crew size is same as for

KC-135; personnel costs could be a “wash”

• Disposal of KC-135Es
Enclosure I

Page 37 GAO-02-724R Air Force Tanker Leasing

33

Depot Maintenance
Enclosure I

Page 38 GAO-02-724R Air Force Tanker Leasing

34

Depot Maintenance

KC-135s Are High Maintenance

• AF study reported total costs to operate and maintain a

KC-135E was $4.6 million in FY 2001, vs. $3.6 million

for R Models per aircraft

• Average days in depot increased

• Fleet-wide increased from 158 days in ’91 to about 400 days in FY ’01

• E Models averaged 428 days in FY ‘01

• Depot “work package” doubled from 1991 to 2000 – from 16,000 labor hours to 32,000

• AF recently reported over 100 KC-135s in depot

simultaneously
Enclosure I

Page 39 GAO-02-724R Air Force Tanker Leasing

35

Depot Maintenance

KC-135s Maintained at Three Depots

• Tinker AFB in Oklahoma City, private

contractors in Birmingham, AL and San Antonio,

TX perform depot maintenance

• AF told us that Oklahoma City is working two

shifts and two contractor facilities are each

working three shifts

• We do not know how long these facilities

have worked multiple shifts or whether these

extra shifts are fully staffed
Enclosure I

Page 40 GAO-02-724R Air Force Tanker Leasing

36

Depot Maintenance

AF Efforts to Reduce Depot Time

• AF told us that depots have made some

improvements that should reduce depot time in the

short run; for example,

• Increased labor at all sites

• Increased number of major structural repairs

done concurrently during depot work

• Reflowed critical path

• In long run, AF believes aging planes will require

more depot time
 Page 41 GAO-02-724R Air Force Tanker Leasing

Enclosure II

Air Force Response to GAO Preliminary Analysis
 Page 42 GAO-02-724R Air Force Tanker Leasing

Enclosure II

(350166)