GAO 

United States Government Accountability Office

Report to Congressional Committees

MILITARY AIRLIFT

DOD Should Take 

Steps to Strengthen 

Management of the 

Civil Reserve Air Fleet 

Program 

September 2009 

GAO-09-625 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 2009

MILITARY AIRLIFT

DOD Should Take Steps to Strengthen Management 

of the Civil Reserve Air Fleet Program 

Highlights of GAO-09-625, a report to 

congressional committees 

To move passengers and cargo, the 

Department of Defense (DOD) 

must supplement its military 

aircraft with cargo and passenger 

aircraft from commercial carriers 

participating in the Civil Reserve 

Air Fleet (CRAF) program. Carriers 

participating in CRAF commit their 

aircraft to DOD to support a range 

of military operations. In the Fiscal 

Year 2008 National Defense 

Authorization Act, Congress 

required DOD to sponsor an 

assessment of CRAF and required 

GAO to review that assessment. 

GAO briefed congressional staff on 

its observations. As discussed with 

the staff, GAO further analyzed 

some of the issues identified in its 

review. This report assesses 

(1) the extent to which DOD has 

assessed potential risks to the 

CRAF program, and (2) the extent 

to which DOD’s management of 

CRAF supports program objectives. 

For this engagement, GAO 

reviewed DOD-sponsored CRAF 

study reports and interviewed 

study leadership. GAO also 

interviewed over 20 of 35 CRAF 

participating carriers that 

responded to a request for a 

meeting, DOD officials, and 

industry officials. 

What GAO Recommends

GAO is recommending that DOD 

(1) conduct risk assessments on 

two CRAF passenger and cargo 

issues and (2) develop policies to 

strengthen its management of the 

CRAF program. In comments on a 

draft of this report, DOD disagreed 

with the first recommendation and 

agreed with the second. 

DOD needs to establish the level of risk associated with declining charter 

passenger capabilities and DOD’s increased need to move very large cargo. 

Although DOD depends on CRAF charter passenger aircraft to move more 

than 90 percent of its peacetime needs, there has been nearly a 55 percent 

decline in this CRAF capacity since 2003. In addition, since 2003, DOD’s large 

cargo movement needs have increased with the acquisition of over 15,000 

Mine Resistant Ambush Protected vehicles. Since there are no U.S. 

commercial cargo aircraft capable of moving cargo this size into Iraq and 

Afghanistan, DOD is using foreign-owned carriers to assist its military aircraft 

in such movements. However, there are scenarios where foreign-owned 

carriers may be unwilling or not allowed to fly. As a result, the lack of a 

commercial U.S. outsized cargo capability might restrict DOD’s ability to meet 

its large cargo airlift needs in a timely manner. DOD has not quantified the 

risks these challenges pose to the CRAF program’s ability to meet DOD’s 

future transportation requirements because DOD has not completed risk 

assessments as described in the 2008 National Defense Strategy. Until risk 

assessments are conducted, DOD will not be sufficiently informed about 

potential risks in the CRAF charter passenger segment and in very large cargo 

airlift capability that could prevent DOD from managing its future airlift needs 

and the CRAF program effectively. 

DOD’s management of CRAF has not provided CRAF participants with a clear 

understanding, which could strengthen the program’s ability to support its 

objectives, in some critical areas of the program. Although internal controls 

such as policies can help meet program objectives, CRAF business partners 

do not have a clear understanding of DOD’s expectations concerning four 

CRAF objectives—an enhanced mobilization base, modernization, increased 

air carrier participation, and communication—because DOD has not 

developed policies in these four areas. First, DOD has not developed policies 

regarding the enforcement of its business rules, such as the 60/40 rule that 

states that participants should fly only 40 percent of their total business for 

DOD. DOD does not consistently enforce this rule and this may decrease the 

mobilization base since it is difficult for carriers to size their fleets to meet 

DOD demands. Second, DOD has not developed policies or economic 

incentives that promote CRAF modernization and this may hinder CRAF 

carriers from modernizing their aircraft. Third, DOD has not developed 

policies regarding oversight of the distribution of its peacetime airlift 

business, the primary incentive to carriers for participating in CRAF. DOD has 

no involvement in this distribution, and the perceptions of some carriers that 

this process is unfair could ultimately reduce carrier participation in CRAF. 

Fourth, DOD has not developed policy concerning communication with the 

carriers on CRAF studies or proposed changes to the CRAF program. DOD 

has not always communicated with carriers prior to implementing changes or 

completing studies. Until DOD develops policies that provide carriers with a 

clear understanding of CRAF, DOD cannot provide reasonable assurance that 

CRAF will meet its primary objective of providing critical airlift. 

View GAO-09-625 or key components.

For more information, contact William Solis, 

(202) 512-8365, solisw@gao.gov. 
Page i GAO-09-625 

Contents 

Letter 1

Results in Brief 3 

Background 7 

DOD Has Not Assessed the Risks That Changes in Charter 

Passenger Capabilities and DOD’s Outsized Cargo Needs Might 

Have on the CRAF Program 10 

DOD Has Not Issued Policies That Would Strengthen Management 

of the CRAF Program 15 

Conclusions 19 

Recommendations for Executive Action 20 

Agency Comments and Our Evaluation 21 

Appendix I Recent Department of Defense Studies 25 

Appendix II Comments from the Department of Defense 26 

Appendix III GAO Contact and Staff Acknowledgments 29 

Related GAO Products 30 

Figure 

Figure 1: Size of CRAF Charter Passenger Fleet and DOD 

Peacetime Business (Fiscal Years 2001 through 2008) 11 

 Military Airlift 
Abbreviations 

AMC Air Mobility Command 

CRAF Civil Reserve Air Fleet 

DOD Department of Defense 

IDA Institute for Defense Analyses 

MRAP Mine Resistant Ambush Protected 

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Page ii GAO-09-625 Military Airlift
Page 1 GAO-09-625 

 

United States Government Accountability Office

Washington, DC 20548 

 

September 30, 2009 

Congressional Committees 

Since September 11, 2001, the U.S. Transportation Command’s Air Mobility 

Command (AMC) has successfully transported more than 6.8 million 

passengers and nearly 3 million tons of cargo by air. To move these 

passengers and cargo, the Department of Defense (DOD) must supplement 

its military aircraft with aircraft from commercial carriers participating in 

the Civil Reserve Air Fleet (CRAF) program. Commercial air carriers 

participating in CRAF contractually commit their aircraft to DOD to be 

called upon, or activated, for use to support a range of military operations. 

At the most demanding end of this range, DOD plans for CRAF to move 

more than 90 percent of its passengers and almost 40 percent of its cargo 

requirements. As an incentive to encourage participation in CRAF, DOD 

contracts exclusively with CRAF participants to fly its daily peacetime 

passenger and cargo airlift business. Currently, this daily peacetime 

business includes airlift for operations in Iraq and Afghanistan, which is 

being handled without an activation of CRAF. CRAF has been activated 

twice—once during Operation Desert Shield/Storm and at the beginning of 

Operation Iraqi Freedom. The Office of the Under Secretary of Defense for 

Acquisition, Technology and Logistics (Transportation Policy) is 

responsible for establishing policies for the CRAF program. The U.S. 

Transportation Command is responsible for the daily management of the 

program and for making recommendations concerning the capability, 

capacity and other requirements for mobility assets needed to execute its 

mission. 

The National Airlift Policy confirms the importance and the necessity of 

CRAF by establishing that national objectives cannot be met without using 

commercial air carriers.1

 DOD has little capability to meet its passenger 

airlift requirements in its military fleet; therefore, DOD relies almost 

entirely on CRAF commercial carriers to fulfill its requirements. Charter 

passenger carriers, operating on the customers’ schedules, provide nearly 

90 percent of all daily, peacetime passenger airlift for DOD, while the 

scheduled carriers, operating on set routes and timetables, provide the 

remainder. In contrast, DOD’s military fleet has the capability to carry 

1

National Security Decision Directive 280, June 24, 1987. 

 Military Airlift 
 

bulk, outsized, and oversized cargo;2 however, DOD relies on commercial 

cargo carriers to move bulk cargo in both peacetime and times of crisis or 

war. Although CRAF cargo carriers can fly oversized cargo when needed, 

they do not have the capability to move outsized cargo. CRAF carriers are 

not capable of loading or moving strategic outsized equipment, such as 

Mine Resistant Ambush Protected (MRAP) vehicles, tanks, and 

helicopters. 

Multiple DOD-sponsored studies have identified risks to the CRAF 

program, with some risks due to a changing business environment and 

challenges within the management of the CRAF program.3

 For example, as 

required by the Fiscal Year 2008 National Defense Authorization Act, DOD 

sponsored an independent assessment of the viability of the CRAF 

program. DOD submitted this assessment to Congress in October 2008, 

and as required by that act, we subsequently conducted a review of that 

assessment and briefed congressional staff on our observations about the 

assessment and some issues we identified about the CRAF program in 

general. As discussed with congressional staff, we further analyzed some 

of the issues identified in that review. This report assesses (1) the extent 

to which DOD has assessed potential risks to the CRAF program and (2) 

the extent to which DOD’s management of CRAF supports program 

objectives. 

To assess the extent to which DOD has assessed potential risks to the 

CRAF program and the extent to which DOD’s management of CRAF 

supports program objectives, we reviewed several DOD-sponsored CRAF 

reports. We interviewed study leadership from the DOD-sponsored studies 

to obtain their perspectives and identify relevant issues relating to the 

CRAF program from their respective studies. We also conducted 

structured interviews with over 20 CRAF air carriers of the 35 

participating in the program as of October 2008 that responded to our 

request for a meeting and interviewed airline industry officials and DOD 

officials at the Office of Secretary of Defense, U.S. Transportation 

Command, and Air Force Air Mobility Command to discuss the CRAF 

 

2

There are three designations of cargo types: bulk, oversized, and outsized. Bulk cargo is 

cargo that will fit on a 463L cargo system pallet or standard commercial airline pallet/cargo 

container. Oversized cargo is air cargo that exceeds the dimensions of a standard (463L) 

pallet, but is air transportable on military and most civilian cargo carriers. Outsized cargo 

exceeds the dimensions of oversized cargo and requires the use of a military C-5 or C-17 

aircraft or surface transportation. 

3

See appendix I for a list of the studies. 

Page 2 GAO-09-625 Military Airlift
 

program. We analyzed this information in the context of DOD’s National 

Airlift Policy, 2008 National Defense Strategy, and airlift requirements to 

determine how issues we identified might affect the CRAF program. We 

discussed the management of the CRAF program with officials at the 

Office of Secretary of Defense, U.S. Transportation Command, and Air 

Mobility Command. We also reviewed the 2008 National Defense Strategy, 

GAO’s Standards for Internal Control in Federal Government,4

 DOD’s 

Manager’s Internal Controls, and U.S. Transportation Command’s 

Manager’s Internal Controls (guidance to implement DOD’s internal 

controls program) to determine how programs should be managed to 

minimize the risk of program failure and to identify elements of effectively 

managed programs to determine if these elements are part of the CRAF 

program. 

We conducted this performance audit from January 2009 to July 2009 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

DOD has not assessed the level of risk that declining charter passenger 

capabilities and DOD’s increased need to move outsized cargo might have 

on future airlift requirements and the CRAF program. Although DOD 

depends on CRAF charter passenger aircraft to move more than 90 

percent of its peacetime and contingency airlift needs, there has been 

nearly a 55 percent decline in this capability since 2003. In 2003, DOD 

relied on a charter air carrier capability comprised of more than 60 

aircraft; however, although DOD passenger needs have increased 

significantly since 2003, the CRAF charter passenger air carrier capability 

has decreased, declining to as few as 19 aircraft in April 2008 before 

stabilizing at 29 aircraft in May 2008. The decline to 19 aircraft delayed the 

return home of Maine National Guard troops in Iraq by about a week and 

caused DOD to quickly find additional airlift. Because scheduled carriers 

have historically been unwilling and/or unable to fly the CRAF missions 

completed by charter carriers, this decline suggests that, at some point in 

Results in Brief 

 

4

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999). 

Page 3 GAO-09-625 Military Airlift
 

the future, charter passenger carriers or aircraft participating in the CRAF 

program may not be able to meet DOD’s airlift needs on a daily basis and 

in contingency operations. In addition, since 2003, DOD’s need to move 

outsized cargo has increased with the acquisition of over 15,000 MRAP 

vehicles. As there are no U.S. commercial cargo aircraft capable of moving 

outsized cargo such as these high priority vehicles into Iraq and 

Afghanistan, DOD is using foreign-owned carriers to support such 

movements. According to DOD officials, using foreign-owned carriers 

relieves some of the stress on military aircraft—there are sufficient 

military aircraft to accomplish the missions—and is less expensive than 

military airlift. As the need to move outsized cargo has increased, use of 

foreign-owned carriers to move these assets has increased; however, in 

some scenarios foreign-owned carriers may be unwilling to fly, and in 

other scenarios, like a CRAF activation, foreign-owned carriers would only 

be used in exceptional circumstances. As a result, the lack of a U.S. 

outsized cargo capability might affect DOD’s ability to meet its outsized 

cargo airlift needs in a timely manner. DOD has not established whether it 

will need to continue to use these foreign-owned aircraft or whether there 

is a need for a U.S. commercial capability to help relieve stress on the 

military aircraft, and has not completed risk assessments, as set out in the 

2008 National Defense Strategy. The 2008 National Defense Strategy 

describes the need to assess, mitigate, and respond to risk in the execution 

of defense programs critical to national security. Until specific risk 

assessments are conducted and actions are taken to mitigate any risks that 

may exist in the CRAF charter passenger segment and in outsized cargo 

capability that could prevent DOD from managing its future airlift needs 

and the CRAF program effectively, DOD and congressional decision 

makers will not be fully informed about unmitigated risks—specifically, 

gaps, shortfalls, or redundancies. 

DOD’s management of the CRAF program has not provided CRAF air 

carrier participants with a clear understanding of some critical areas of the 

program. Management internal controls help provide reasonable 

assurance that programs are focused on and can achieve their objectives 

by requiring clearly articulated policies. The National Airlift Policy states 

that federal policies governing the CRAF program should enhance the 

Page 4 GAO-09-625 Military Airlift
 

mobilization base,5 promote aircraft modernization, increase air carrier 

participation, and provide a framework for dialogue and cooperation with 

commercial air carriers; however, we found that CRAF business partners 

do not have a clear understanding of DOD’s expectations concerning these 

objectives because DOD lacks formal, written policies in four critical areas 

of the program, which could strengthen the program’s ability to support its 

objectives. 

• First, DOD’s lack of policy regarding the enforcement of its business 

rules may negatively affect the CRAF mobilization base. DOD does not 

routinely enforce a basic CRAF business rule, outlined in the CRAF 

solicitation, allowing that no more than 40 percent of a CRAF carrier’s 

revenues should come from the government. DOD has no formal policy 

describing this rule or when it will be enforced, thus leaving CRAF 

participants and those interested in becoming participants potentially 

unaware of DOD’s intent. Also, CRAF carriers have stated that the 

inconsistent enforcement of this rule makes it difficult since leasing or 

buying aircraft to meet DOD needs requires long-term planning. 

• Second, DOD has not developed CRAF policies that promote 

modernization, although modernization of the CRAF fleet is an 

objective of the National Airlift Policy and has been acknowledged as a 

goal by senior Air Force officials. Despite repeated congressional 

testimony from DOD officials stressing the importance of 

modernization, DOD does not provide CRAF participants any 

guidelines, objectives, or economic incentives that would encourage 

modernization. Some charter passenger air carriers, which help fly the 

majority of peacetime missions for DOD, fly aircraft in the Federal 

Aviation Administration’s National Aging Aircraft Research Program. 

In the absence of specific modernization objectives, CRAF business 

partners will remain unaware of DOD’s expectations toward 

modernization, and might not take steps needed to modernize their 

aircraft. 

• Third, DOD’s lack of policy regarding the distribution of DOD’s 

peacetime airlift business may negatively affect CRAF air carrier 

participation. According to DOD officials, the process and procedures 

 

5

DOD defines the mobilization base as the total of all resources available, or that can be 

made available, to meet foreseeable wartime needs. Such resources include the manpower 

and materiel resources and services required for the support of essential military, civilian, 

and survival activities, as well as the elements affecting their state of readiness, such as 

planning with industry and modernization of equipment. 

Page 5 GAO-09-625 Military Airlift
 

for distributing DOD’s peacetime airlift business among carriers have 

not been defined by and are not overseen by DOD. While DOD defines 

how participants earn entitlements to peacetime airlift business, DOD 

actually distributes the entitlements to three teams of CRAF 

participants. The teams then distribute the business based on 

arrangements made by each team’s members. In our discussions with 

carriers, some carriers expressed concerns that the distribution of 

DOD’s peacetime business was unfair, because carriers were not 

getting the distribution they expected based on their contributions to 

CRAF, and lacked transparency. Because the distribution of this 

business is intended to incentivize CRAF participation, this perception 

could ultimately reduce carrier participation in CRAF. 

• Fourth, DOD has not developed policy that establishes a framework 

for dialogue and cooperation with commercial air carriers, which 

could involve CRAF participants in decision-making and facilitate 

sharing information with them. According to airline officials, DOD has 

not routinely involved CRAF carriers in proposed changes to the CRAF 

program in advance and it has not shared CRAF study results with the 

carriers until recently. As a result, CRAF participants told us that they 

have been unable to adjust their business plans to better address DOD 

needs and easily absorb some of the program changes that have been 

announced. DOD has told us that there are many ways in which they 

communicate with the carriers. 

By developing policies that provide commercial air carriers with a clear 

understanding of critical aspects of the CRAF program, DOD can 

strengthen its management of the CRAF program and have reasonable 

assurance that the CRAF program will meet its primary objective of 

providing critical airlift to support DOD’s potential future needs. 

To provide additional assurance the CRAF program can continue to meet 

DOD airlift needs and to assist DOD in more effectively managing the 

program, we are making two recommendations. First, to help DOD 

identify and analyze risks that could assist DOD in meeting its future airlift 

requirements, we recommend that DOD conduct risk assessments that 

evaluate the declining U.S. charter passenger capability and the lack of a 

U.S. commercial outsized cargo capability and develop appropriate 

policies and procedures for mitigating any identified risks. Second, to 

facilitate effective management of the critical partnership between DOD 

and the U.S. commercial air carrier industry and to help ensure that CRAF 

can meet its program objectives, we recommend that DOD develop formal, 

written policy that establishes: enforcement guidelines for the basic CRAF 

Page 6 GAO-09-625 Military Airlift
 

business rules; objectives and measures of effectiveness required to 

achieve modernization of the CRAF fleets; oversight over how peacetime 

airlift business is distributed; and mechanisms by which DOD seeks input 

from CRAF participants in program issues and concerns and information 

sharing. 

In commenting on a draft of this report, DOD did not agree with our 

recommendation to conduct risk assessments that evaluate the declining 

U.S. charter passenger capability and the lack of a U.S. commercial 

outsized capability. DOD commented that the 2008 CRAF viability study 

conducted by the Institute for Defense Analyses (IDA) evaluated the risk 

of the charter passenger industry, and based on that study, they are 

examining potential mitigation strategies for the declining passenger 

charter fleet. However, during our review, we found no evidence that U.S. 

Transportation Command has conducted an up-to-date risk assessment or 

is developing policies and procedures to mitigate any risks associated with 

declining charter passenger capability. As we reported, the 2008 IDA study 

data ended in 2007. Also, the study did not establish a level of acceptable 

risk for the CRAF program. Additionally, DOD commented that there was 

no need to develop any mitigation strategies for an outsized cargo 

capability because CRAF is not intended to provide an outsized cargo 

capability. Given DOD’s recent addition of over 15,000 MRAPs, we 

continue to believe that risk assessments, as outlined in the National 

Security Strategy, of both the charter passenger and outsized cargo issue 

would give DOD specific information that would help them shape their 

future strategic transportation requirements. DOD concurred with our 

recommendation to develop formal, written policy that establishes: 

enforcement guidelines for the basic CRAF business rules; objectives and 

measures of effectiveness required to achieve modernization of the CRAF 

fleets; oversight over how peacetime airlift business is distributed; and 

mechanisms by which DOD seeks input from CRAF participants in 

program issues and concerns and information sharing. A more detailed 

discussion of DOD’s comments and our response to these comments 

follow the Recommendations for Executive Action section of this report. 

The CRAF program was created in 1951 and its importance was reaffirmed 

by the National Airlift Policy in 1987. The National Airlift Policy states that 

the military will rely on the commercial air carrier industry to provide the 

airlift capability required beyond that available in the military airlift fleet. 

Additionally, the policy includes nine guidelines to meet airlift 

requirements in peacetime and wartime. These guidelines direct that 

policies be designed to 

Background 

Page 7 GAO-09-625 Military Airlift
 

• increase participation in CRAF; 

• enhance the mobilization base of the U.S. commercial air carrier 

industry;6

• provide a framework for dialogue and cooperation with commercial 

air carriers; and 

• promote the development of technologically advanced transport 

aircraft and related equipment. According to DOD officials, these 

guidelines serve as the objectives of the CRAF program. 

CRAF commitments are divided into three levels or stages—Stages I, II, 

and III—depending on the size of the operations or contingency in which 

DOD is involved. As defined in the CRAF contract between DOD and its 

commercial partners, Stage I activation supports expanded operations 

beyond DOD’s routine daily operations and provides the equivalent of 30 

passenger and 30 cargo aircraft; Stage II activation is used in the event of a 

major regional contingency and supporting mobilization and provides the 

equivalent of 87 passenger aircraft and 75 cargo aircraft; and Stage III 

activation supports two major regional contingencies and provides the 

equivalent of 136 passenger aircraft and 120 cargo aircraft. When CRAF is 

activated, carriers have a specified time frame in which to provide aircraft, 

with pilots and crews, to DOD. Once activated, air carriers continue to 

operate and maintain the aircraft with their resources; however, AMC 

controls the aircraft missions. 

The majority of DOD passenger flights require carrier flexibility, as many 

DOD missions are not routine in their locations or timing. Charter 

passenger carriers fly the majority of DOD peacetime, contingency, and 

Stage I business because charter passenger carriers’ businesses are 

designed with the flexibility to provide airlift based on the customer’s 

(DOD’s) schedule. Scheduled passenger carriers operate commercial 

flights on regular routes and can ill afford unplanned disruptions to their 

airline networks. However, because of their large fleet sizes, the scheduled 

carriers are a critical component of the CRAF fleet. 

As an incentive to encourage participation in CRAF, DOD contracts 

exclusively with CRAF participants to fly its daily, peacetime passenger 

 

6

DOD defines the mobilization base as the total of all resources available, or that can be 

made available, to meet foreseeable wartime needs. Such resources include the manpower 

and materiel resources and services required for the support of essential military, civilian, 

and survival activities, as well as the elements affecting their state of readiness, such as 

planning with industry and modernization of equipment. 

Page 8 GAO-09-625 Military Airlift
 

and cargo airlift business and any surge for contingencies. As articulated 

in an August 2008 DOD-sponsored CRAF study, carriers earn the 

entitlement to DOD’s peacetime business through points awarded based 

on their aircraft commitments to each CRAF stage.7

 According to the 

study, the greater the commitment by the carrier, the greater the amount 

of peacetime business to which a CRAF participant is entitled. These 

points become the basis of a carrier’s entitlement to compete for the 

procurement of peacetime passenger and cargo airlift business. 

To maximize the value of these entitlements, CRAF participants have 

formed into three teaming arrangements, which are created and managed 

by the participants themselves. These teams comprise of a mix of 

passenger and cargo carriers that join together to pool their entitlements 

to DOD business; that is, the entitlement directly associated with a 

carrier’s individual commitment is combined with the entitlements earned 

by other carriers on their team. DOD assigns peacetime business to the 

team based on the team’s total entitlement and availability, not to the 

individual carrier. Once that business is assigned to the team, the team 

leader, or administrator, is responsible for accepting and distributing the 

business to the carriers at their discretion. 

DOD’s 2008 National Defense Strategy requires the military to assess, 

mitigate, and respond to risk that could potentially damage national 

security.8

 Identifying and managing risk is also an important goal of all 

successful internal control programs. Internal controls include the 

organization, policies, and procedures used by agencies to reasonably 

ensure that, among other things, critical programs like CRAF achieve their 

intended results effectively and efficiently. Internal control standards 

require that management should provide for an assessment of the risks the 

agency faces from both external and internal sources. These standards 

also require that there be control activities—that is, the policies, 

procedures, techniques, and mechanisms that enforce management’s 

directives—in place to help insure that actions are taken to address risk. 

 

7

Upon commitment and acceptance to the CRAF program, the CRAF carrier’s aircraft are 

assigned points based on range, payload, and productive utilization rate, essentially 

determining the value of each aircraft to the program. 

8

The National Defense Strategy defined risk in terms of the potential for damage to national 

security combined with the probability of the occurrence and the measurement of the 

consequences should the underlying risk remain unaddressed. 

Page 9 GAO-09-625 Military Airlift
 

DOD Has Not 

Assessed the Risks 

That Changes in 

Charter Passenger 

Capabilities and 

DOD’s Outsized Cargo 

Needs Might Have on 

the CRAF Program 

Charter Passenger 

Capability Has Declined 

Although DOD depends heavily on CRAF charter passenger capability, this 

capability has declined substantially over the past 5 years and DOD has 

not established the risk that this decline may have for the CRAF program. 

DOD depends on the charter passenger industry to move more than 90 

percent of its peacetime requirements, as well as all contingency surges. 

While the charter passenger capability has, historically, satisfied DOD’s 

requirements, there has been a 60 percent decline in this capability since 

2003 due mainly to a declining demand for charter airlines in the 

commercial sector. Figure I shows this decline in CRAF participants’ 

charter passenger aircraft from a high of 66 aircraft in 2004 to 29 in 2008. 

Additionally, the figure shows that, even as commercial passenger carriers’ 

revenues from DOD peacetime business increased to historic levels after 

2001, and the amount of business available to charter passenger carriers 

was higher than it had ever been, the charter aircraft capacity continued to 

decline. 

Page 10 GAO-09-625 Military Airlift
 

Figure 1: Size of CRAF Charter Passenger Fleet and DOD Peacetime Business 

(Fiscal Years 2001 through 2008) 

Source: GAO analysis of CRAF data.

0

500

1.000

1.500

2.000

2001 2002 2003 2004 2005 2006 2007 2008

0

10

20

30

40

50

60

70

Number of aircraft Dollars (in millions)

Year

Combined CRAF charter passenger carrier fleet size per year

Total CRAF passenger business revenue per year

This decline in charter passenger capability led to a finding in the August 

2008 DOD-sponsored CRAF viability study that this capability may become 

marginal for unexpected peacetime and contingency requirements. 

However, the study did not reflect that, in April 2008, CRAF’s largest 

charter passenger carrier ceased operations due to bankruptcy. The 

sudden loss of 16 charter passenger airplanes from the CRAF program left 

DOD with only 3 charter passenger carriers and 19 total charter passenger 

aircraft until May 2008, when another passenger carrier dropped its 

scheduled services and committed 20 charter aircraft to CRAF. However, 

according to industry officials and confirmed by DOD, the sudden 

reduction in charter aircraft after the April 2008 bankruptcy led to a 

situation in which the return home of some redeploying Maine National 

Guard troops in Iraq was delayed by about a week. Because of a limited 

charter aircraft capability, the Commander, U.S. Transportation 

Command, personally called CRAF scheduled carriers and asked them to 

Page 11 GAO-09-625 Military Airlift
 

free up aircraft to transport these troops back to the United States.9 The 

bankruptcy of DOD’s largest charter passenger carrier without notice 

demonstrates the volatility of the charter passenger industry and raises 

questions about the industry’s ability to continue to meet DOD 

requirements without a CRAF activation involving the larger, scheduled 

carriers to satisfy the requirements the charter passenger industry was 

filling. 

There is little or no excess capacity among scheduled carriers. The five 

scheduled passenger carriers we spoke with told us that, due to market 

conditions and shrinking fleets that have been tailored to meet their 

commercial demands more efficiently, scheduled carriers are reluctant to 

commit aircraft to peacetime operations, contingencies, and CRAF Stage I 

beyond a small, required contribution.10 According to airline and industry 

officials, pulling a single aircraft out of a scheduled passenger carrier’s 

daily planned service can cause major disruptions to its routes; therefore, 

to support any stage of CRAF activation, scheduled air carriers depend on 

a decrease in their commercial demands, similar to the reductions seen 

after September 11, 2001, that would make aircraft available. If the charter 

passenger industry business continues to decline, DOD will likely be 

forced to turn to scheduled air carriers to fulfill daily and Stage I 

requirements currently met by the charter carriers. However, given the 

scheduled carriers’ smaller fleets, DOD has not quantified the number of 

charter passenger aircraft it may need on a daily basis and in 

contingencies and Stage I, or the risk of having a smaller charter passenger 

capability to handle these requirements. DOD officials have told us that 

they have no concerns that sufficient CRAF participants will respond to a 

call for airlift, whether during peacetime or in an activation. 

DOD’s Need to Move 

Outsized Cargo Has 

Increased 

Since 2005, DOD’s need to move outsized cargo to support peacetime and 

contingency operations has increased with the acquisition of more than 

15,000 MRAP vehicles. Because there are no U.S. commercial cargo 

aircraft capable of moving outsized cargo such as MRAP vehicles into Iraq 

 

9

It should be noted that the teaming arrangements may provide DOD with an additional 

means to enforce the contract. Under the terms and conditions of some of these contracts 

the carriers are jointly and severely liable and would be contractually bound to provide the 

aircraft and services required under the terms and conditions of the contract. 

10All carriers must commit at least one aircraft to Stage I to be eligible to commit to the 

later stages. 

Page 12 GAO-09-625 Military Airlift
 

and Afghanistan, DOD is using foreign-owned carriers to support such 

movements to supplement its military airlift capability. As of April 2009, 

DOD had moved a total of 3,890 MRAPs by air, of which almost 80 percent 

were moved using foreign-owned carriers flying large Antonov-124 

aircraft. We found and DOD confirmed that in the 2005 Mobility 

Capabilities Study, DOD planned for U.S. commercial cargo carriers 

participating in the CRAF program to move only bulk cargo, and did not 

identify a need for these carriers to move outsized cargo; however, 

without some supplemental capability—such as the use of foreign-owned 

carriers—the need for DOD to move outsized cargo into areas of crisis, 

and have that cargo arrive in a timely manner, could limit DOD’s ability to 

meet future airlift requirements. According to DOD analysts involved in 

the ongoing Mobility Capabilities and Requirements Study—2016, DOD 

will again plan for CRAF cargo participants to carry only bulk cargo. 

As DOD moves additional troops and equipment into land-locked 

Afghanistan and in similar scenarios in the future, the need to airlift 

MRAPs and other large equipment, like helicopters, may continue to need 

the use of commercial carriers to assist military airlift. However, it is not 

clear whether foreign-owned carriers would be able or willing to fly in 

certain scenarios. For example, DOD officials acknowledged that foreignowned carriers, for security reasons, would not likely be used during a 

CRAF activation.11 Moreover, we believe the use of foreign-owned 

companies in support of U.S. military operations could be problematic if 

or when foreign-owned carriers find supporting a U.S. contingency to be 

inconsistent with their national interests. For example, in 2008, when the 

U.S. Transportation Command was using Russian-based carriers to fly 

outsized cargo to Iraq, Afghanistan, and other locations, U.S. military 

aircraft ferried Georgian troops from Iraq back to Georgia in anticipation 

of a potential confrontation with Russian troops. We believe that risk may 

be increased in such scenarios in the future. Without further analysis of 

DOD’s options for meeting its outsized cargo needs, including the potential 

role of commercial carriers, the inability of DOD to meet its needs to move 

outsized cargo into areas of crisis and have that cargo arrive in a timely 

manner could increase risk for DOD operations. However, DOD officials 

told us that DOD is using the foreign-owned aircraft only to ease the high 

stress on military aircraft and because such use is less expensive than 

 

11While foreign-owned carriers cannot fly CRAF missions, foreign-owned carriers can fly 

DOD (CRAF-like) chartered missions during peacetime operations in compliance with the 

Fly CRAF Act. These DOD chartered missions are contracted to CRAF participants, which 

subcontract these missions to foreign-owned carriers. 

Page 13 GAO-09-625 Military Airlift
 

military aircraft, not because there is an insufficient number of military 

aircraft available to fly this outsized cargo. 

DOD Is Not Fully Aware of 

How Changes in Its 

Charter Passenger Airlift 

Capabilities and DOD’s 

Outsized Cargo Needs 

Affected CRAF Because It 

Has Not Conducted Risk 

Assessments 

DOD is not fully aware of the extent to which these changes may have 

affected the CRAF program’s ability to meet DOD’s future transportation 

requirements because DOD has not conducted risk assessments as 

described in the 2008 National Defense Strategy. In this strategy, DOD 

defines risk to the national defense in terms of the potential for damage to 

national security combined with the probability of occurrence and a 

measurement of the consequences should the underlying risk remain 

unaddressed. This strategy also states that DOD must account for future 

challenges and their associated risks12 to meet the objective of winning our 

nation’s wars and describes the need to assess, mitigate, and respond to 

risk in the execution of defense programs critical to national security. In 

the case of the CRAF program, risk assessments can be used to determine 

if there are any gaps, shortfalls, or redundancies in the charter passenger 

or outsized cargo segments that could prevent DOD from meeting future 

airlift requirements. 

The most recent DOD sponsored CRAF study, issued in August 2008, 

predicted that passenger charter capability may become marginal, but the 

capabilities reviewed in the study did not include the further declines in 

this capability that occurred in 2008. The study also did not quantify the 

risk associated with the passenger charter capability decline that has 

already occurred. In accordance with both GAO and DOD management 

internal controls,13 a risk assessment could inform program managers by 

establishing the maximum and minimum acceptable risk for the CRAF 

program. For example, it could identify the numbers of charter passenger 

aircraft necessary to meet DOD requirements. Without a risk assessment, 

DOD will continue to be uncertain what the levels of required CRAF 

charter participation is necessary to fulfill requirements, and DOD and 

industry decisions makers will not be able to begin to take steps to 

address the risks. 

 

12Future challenges risks are those associated with the department’s capacity to execute 

future missions successfully against an array of prospective future challengers. 

13GAO, Internal Control Management and Evaluation Tool, GAO-01-1008G (Washington, 

D.C.: August 2001); GAO, Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999); and Department of Defense 

Instruction 5010.40, Managers’ Internal Control Program Procedures (January 4, 2006). 

Page 14 GAO-09-625 Military Airlift
 

Furthermore, according to DOD officials, DOD has not conducted a risk 

assessment that examines outsized cargo movement, including the use of 

commercial air carriers to supplement its military fleet, and identifies any 

consequences of relying on foreign owned carriers to meet peacetime and 

contingency needs. As previously stated, DOD is using foreign-owned 

carriers to move MRAPs and other outsized equipment to Afghanistan and 

Iraq. However, the 2005 Mobility Capabilities Study14 predates the 

acquisition of more than 15,000 outsized MRAPs. Additionally, the August 

2008 CRAF study did not assess any CRAF outsized cargo movement. A 

risk assessment could determine whether a gap, shortfall, or redundancy 

exists in relation to the U.S. commercial and military outsized cargo 

capability. In addition, a risk assessment could provide information to 

decision makers regarding the possibility of potential damage to national 

security from the reliance on foreign-owned carriers and the probability of 

such damage in future contingencies. Without such a risk assessment, 

DOD may not know the most effective method for transporting outsized 

cargo, and if any methods present potential risk to national security. 

DOD’s management of the CRAF program has not provided CRAF air 

carrier participants with a clear understanding of some critical areas of the 

program, which could strengthen the program’s effectiveness and the 

ability to support its objectives. Although management internal controls 

such as clearly articulated policies can help meet program objectives, 

DOD has not developed policies related to four of the CRAF program 

objectives as outlined in the National Airlift Policy. These four objectives 

include: enhancing the mobilization base,15 promoting aircraft 

modernization, increasing air carrier participation, and providing a 

framework for dialogue and cooperation with commercial air carriers. As 

outlined by both GAO and DOD, management internal controls help 

provide reasonable assurance that, through effective management, 

DOD Has Not Issued 

Policies That Would 

Strengthen 

Management of the 

CRAF Program 

 

14The Mobility Capabilities Study which began in May 2004, reassessed DOD’s mobility 

capabilities against the backdrop of a revised National Military Strategy. The study results 

were intended to support decisions on future strategic airlift needed to meet varying 

military requirements of combat operations and smaller military efforts. This study is the 

fourth in a series of major mobility studies that DOD has conducted since the end of the 

Cold War. 

15DOD defines the mobilization base as the total of all resources available, or that can be 

made available, to meet foreseeable wartime needs. Such resources include the manpower 

and materiel resources and services required for the support of essential military, civilian, 

and survival activities, as well as the elements affecting their state of readiness, such as 

planning with industry and modernization of equipment. 

Page 15 GAO-09-625 Military Airlift
 

programs can achieve their objectives. According to these management 

internal controls, one way to help assure that a program’s objectives are 

met is to establish clearly articulated policies. Policies, a form of 

management control, are, according to U.S. Transportation Command, 

intended to provide guidance and procedures to carry out operations or 

achieve objectives. However, we found that CRAF business partners do 

not have a clear understanding of important aspects of the CRAF program 

because DOD lacks policies in critical areas of the CRAF program that 

could help DOD meet its program’s objectives. U.S. Transportation 

Command officials have stated that the CRAF contract with the carriers 

serves as policy. However, the contract does not contain some elemental 

items of policy including objectives, goals, and measures of effectiveness 

as outlined in GAO and DOD management internal controls. 

DOD Has Not Developed 

Policies Related to Four 

CRAF Program Objectives 

DOD has not developed policy regarding the enforcement of its business 

rules, such as the 60/40 rule, that would help strengthen the CRAF 

mobilization base. More than 40 years ago, DOD established measures to 

ensure that CRAF air carriers had both commercial and DOD revenue 

streams. These measures evolved into what is now known as the 60/40 

rule, a rule defined in the CRAF solicitation allowing that no CRAF carrier 

should collect more than 40 percent of its revenues from DOD business. 

Carriers that earn more than 40 percent of their revenue from DOD may be 

penalized by reductions in their entitlement to DOD business. The original 

goals of the rule were to ensure that CRAF carriers maintained a strong 

business base, efficient operations, and modern fleets, all of which would 

prevent carriers from going out of business when DOD demands were low. 

The rule would also provide DOD with a surge capability to draw on if 

demand grew suddenly. Although DOD created the 60/40 rule with these 

intended goals, several CRAF carriers told us that they are unaware of the 

intent of the rule today because they are not sure if they have to follow the 

rule, or if it is even being enforced. 

DOD Has Not Developed Policy 

Concerning 60/40 Rule 

Enforcement 

Some CRAF carriers have broken the 60/40 rule by depending in large part 

on DOD for their revenue. However, because there is no written DOD 

policy describing the rule and its enforcement, no carrier could tell us 

when, or under what conditions, the rule is actually enforced. According 

to airline officials, this lack of guidance affects carriers’ business plans 

because they are not sure whether to account for 60/40 rule compliance 

Page 16 GAO-09-625 Military Airlift
 

when determining the size their fleets. Unclear enforcement parameters 

also make it difficult to plan lease or purchase of planes or how many to 

acquire. Three DOD-sponsored CRAF studies completed in the last 3 years 

have all given differing recommendations regarding the 60/40 rule, adding 

to the ambiguity as to whether or not the rule is or will be in effect. 

Additionally, it is unclear whether or not CRAF objectives of participation 

and meeting DOD surge demands are being met. Without policy that 

clearly states the guidelines and objectives of the 60/40 rule, CRAF carriers 

may not be able to properly size their fleets to meet DOD demands, and 

have the capacity for DOD to draw on to meet demands, which may 

decrease the mobilization base of the CRAF program. 

DOD has not developed policies that promote CRAF fleet modernization, 

although DOD officials have recognized the need for a more modern CRAF 

fleet. The National Airlift Policy directs that policies be created to promote 

the development of technologically advanced transport aircraft in order to 

ensure a commercial airlift capability. In addition, a December 2007 DODsponsored CRAF study acknowledged the importance of modernization 

and recommended that DOD develop policies to encourage CRAF carriers 

to modernize their existing fleets. Moreover, DOD officials have 

recognized the necessity of a modernized commercial air fleet by 

repeatedly testifying before Congress about its importance for the 

continued viability of the program. 

DOD Has Not Developed Policy 

Concerning CRAF Fleet 

Modernization 

However, DOD has not provided CRAF participants with policies that 

include guidelines, objectives, or economic incentives that would 

encourage modernization. Because the charter passenger industry plays 

such a large role in moving DOD passengers, we believe it is in DOD’s 

interest to ensure the commercial airlines have guidelines and incentives, 

such as a rate structure that would pay more for carriers to fly newer 

airplanes, to assist in modernizing their fleets. Two of DOD’s largest 

remaining charter passenger carriers are flying large numbers of aircraft 

listed on the Federal Aviation Administration’s Aging Aircraft List. As the 

December 2007 DOD-sponsored CRAF study warned, these planes will 

soon be retired as the costs of inspections, maintenance, and lifeextension work becomes prohibitive. Since these aircraft are being used to 

fly DOD business almost exclusively, charter passenger carriers told us 

that they look to DOD to provide guidance and incentives to modernize. 

DOD officials told us that they cannot influence modernization or force 

the carriers to modernize. However, without DOD policy that provides 

specific modernization guidelines, CRAF carriers may not see a reason or 

have a business case to take steps needed to modernize their aircraft. 

Page 17 GAO-09-625 Military Airlift
 

DOD has not developed policies regarding the oversight of distribution of 

its peacetime airlift business, which may negatively affect CRAF air carrier 

participation and may affect DOD’s ability to manage the CRAF program 

effectively. DOD’s incentive system of contracting with CRAF participants 

to fly its daily peacetime business is intended to meet the program 

objective of increasing air carrier participation in CRAF by providing each 

CRAF participant with a reasonable share of peacetime business. DOD 

policy that includes guidance, instructions, regulations, procedures, or 

rules that clarify the CRAF incentive system and some oversight of the 

distribution of peacetime business would give CRAF carriers a clearer 

understanding of this important process. 

DOD Has Not Developed Policy 

Concerning Oversight of 

Distribution of Peacetime 

Business 

According to DOD officials, the process and procedures for distributing 

DOD’s peacetime airlift business have not been described in policy and are 

not overseen by DOD. As discussed earlier, DOD awards individual 

carriers points based on the number and type of aircraft they commit to 

CRAF. These points become the basis of a carrier’s entitlement to compete 

for the procurement of peacetime passenger and cargo airlift business. To 

maximize these points, the carriers have formed themselves into three 

teams that have their own agreements on how the business will be 

distributed among the team members. U.S. Transportation Command 

officials confirmed that they distribute peacetime business to the teams 

and have no further involvement in how the teams distribute peacetime 

business among the members. The officials also said that they consider the 

existing system to be adequate in meeting program objectives. In the 

absence of DOD oversight and control, some of the CRAF carriers have 

expressed concerns that peacetime business distribution is not 

transparent and can be inequitable. Some CRAF participants have told us 

that teams distribute DOD peacetime contracts disproportionate to an 

individual air carrier’s CRAF commitment. These carriers also told us that 

the result is that some CRAF participants receive less DOD business than 

their entitlement reflects. Some CRAF carriers told us that the execution 

of the incentive system discourages participation and, in some instances, 

could cause carriers to go out of business. We understand that U.S. 

Transportation Command and Air Mobility Command have no involvement 

with the formation of the teams or the agreements teams have reached 

with their members. However, without DOD policies and oversight over 

the final distribution of the peacetime business that flows from the 

incentive system established by DOD, DOD cannot be sure that this system 

is accomplishing its goal of enhancing carrier participation in CRAF. 

Page 18 GAO-09-625 Military Airlift
 

DOD has not developed policy that establishes a framework for dialogue 

and cooperation with commercial air carriers that would invite CRAF 

participants to comment on pending program decisions and facilitate 

sharing information with them. Although facilitating an effective 

partnership between DOD and commercial carriers is a stated objective of 

the CRAF program, airline officials stated that DOD has not involved 

CRAF participants in some important program decisions that have had 

significant impact on the participants’ business plans. For example, DOD 

announced a policy change that decreased the amount of money carriers 

were reimbursed for fuel, which is allowed under the CRAF contract. 

Carriers told us that they factor in fuel reimbursements in their yearly 

business plans, and are not prepared to adjust to a significant pricing 

change during the middle of a year, especially when they had no 

knowledge of the change ahead of its implementation and thus could not 

plan in advance for the effects. In addition, until recently, DOD had not 

shared information from DOD-sponsored studies on the CRAF program 

with CRAF carriers. For example, of the four DOD-sponsored CRAF 

studies completed in the past 6 years, most carriers we talked to told us 

they had neither seen nor heard of the studies until late 2008. Of the CRAF 

carriers we interviewed, only one carrier reported receiving a copy of any 

DOD-sponsored CRAF study. 

DOD Has Not Developed Policy 

Concerning DOD and CRAF 

Carrier Communication 

DOD officials have said that mechanisms are in place for effective CRAF 

communication between DOD and CRAF carriers, such as using trade 

associations to perform what DOD officials describe as an “industrial 

reality check” and holding industry days and conferences. However, 

according to some carriers, communication through trade associations is 

not sufficient because some carriers are not allowed a voice in meetings, 

and some carriers are not members of the associations at all. Several 

carriers stated that DOD has little communication with them beyond using 

trade associations and annual meetings. With a clearly described policy 

that establishes a framework for an effective partnership fostering 

communication, DOD could strengthen its management of the CRAF 

program and enhance its relationship with the carriers, thus ensuring 

continued participation in CRAF. 

Given the importance of CRAF in moving passengers and cargo for DOD to 

support peacetime and contingency operations and major operations 

requiring CRAF activation, it is critical for the CRAF program to be able to 

meet DOD’s future needs. By policy, statute, and contract, DOD depends 

on CRAF business partners that increasingly find themselves in a 

challenging business environment. If the charter passenger industry 

Conclusions 

Page 19 GAO-09-625 Military Airlift
 

continues to decline, DOD could increasingly turn to scheduled air carriers 

to fulfill the daily and Stage I requirements that are currently being met by 

the charter carriers; however, the scheduled carriers may not be willing or 

able to fly these missions and meet DOD’s airlift needs. Additionally, the 

potential absence of sufficient outsized cargo capability could potentially 

jeopardize national security by preventing DOD from accomplishing its 

missions due to an inability to move outsized cargo into areas of crisis 

within the time frames the commanders need it to arrive. Until risk 

assessments are conducted and actions are taken to mitigate any risks that 

are identified, DOD and industry decision makers will not be fully 

informed about risks in the CRAF charter passenger segment and in 

outsized cargo capability that could prevent CRAF from meeting DOD’s 

airlift requirements. Moreover, the lack of appropriate policies that 

address critical areas of the CRAF program hinders DOD’s ability to meet 

the objectives of the program. Until DOD develops policies that provide 

commercial air carriers with a clear understanding of critical aspects of 

the CRAF program, such as enforcement of business rules (such as the 

60/40 rule), specific modernization guidelines, distribution of peacetime 

business, and a framework for communication, thus strengthening its 

management of the program, DOD cannot provide reasonable assurance 

that the CRAF program will meet its primary objective of providing critical 

airlift to support DOD operations. 

To assist DOD with management of the CRAF program, we are making the 

following two recommendations for executive action. 

First, to help DOD identify and analyze risks associated with achieving 

program objectives, we recommend that the Secretary of Defense direct 

the Commander, U.S. Transportation Command to 

Recommendations for 

Executive Action 

• Conduct risk assessments as outlined in DOD’s National Defense 

Strategy that 

• evaluate the declining U.S. charter passenger capability by 

establishing the maximum and minimum acceptable risk 

for the CRAF program expressed in terms of numbers of 

charter passenger aircraft necessary to meet DOD 

requirements; and 

• evaluate the lack of an outsized cargo capability to 

supplement military capability and the extent to which the 

reliance on foreign owned carriers is appropriate; 

• Develop appropriate policies and procedures for mitigating any 

identified risks. 

Page 20 GAO-09-625 Military Airlift
 

Second, to strengthen the effectiveness of the critical partnership between 

DOD and the U.S. commercial air carrier industry and the management of 

the CRAF program to achieve its objectives, we recommend that the 

Secretary of Defense direct the Under Secretary of Defense for 

Acquisition, Technology and Logistics (Transportation Policy) to develop 

policy that 

• establishes enforcement guidelines for the basic CRAF business rules, 

to include intent, objectives, and measures of effectiveness 

mechanisms; 

• establishes incentives, objectives and measures of effectiveness 

required to ensure modernization of the CRAF fleets; 

• establishes and describes oversight mechanisms by which DOD will 

monitor how peacetime airlift business is distributed to ensure that its 

CRAF incentive program is working as intended; and 

• establishes and describes the mechanisms by which DOD includes 

CRAF participants to provide comments on pending program decisions 

and in information sharing, and that includes objectives and measures 

of effectiveness of these activities. 

In written comments on a draft of this report, DOD did not agree with our 

first recommendation to conduct risk assessments regarding the declining 

charter passenger capability and the lack of an outsized cargo capability as 

part of the Civil Reserve Air Fleet, but partially agreed with that part of the 

recommendation to develop policies and procedures to mitigate any 

identified risks. DOD agreed with our second recommendation to develop 

policy for aspects of the CRAF program. DOD’s comments are reprinted in 

appendix II. 

Agency Comments 

and Our Evaluation 

While DOD disagreed with our recommendation to conduct risk 

assessments, DOD agreed with the value of conducting a risk assessment 

on the declining U.S. charter passenger charter capability, stating that this 

has already been evaluated by the CRAF viability study conducted by IDA 

DOD also stated that, based on the recommendations of the IDA study, 

DOD is already examining the declining passenger charter fleet and 

potential mitigation strategies. However, as we stated in our report, IDA’s 

report included data that stopped at 2007 and did not include data 

regarding the 2008 business termination of a carrier that provided nearly 

50 percent of the charter passenger capability available to DOD. Also, 

while the IDA report stated that the charter passenger industry may 

become marginal, data analysis that supported this statement did not 

establish the maximum and minimum acceptable risk for the CRAF 

Page 21 GAO-09-625 Military Airlift
 

program. Therefore, we continue to believe that our recommendation to 

establish acceptable risk levels is still viable and important. 

DOD also disagreed with the second part of our recommendation 

concerning the need to conduct a risk assessment on the lack of a CRAF 

outsized cargo capability, stating that the CRAF program is not intended to 

provide outsized cargo capability. In their comments, DOD stated that its 

use of foreign carriers to transport outsized cargo is a strategy to reduce 

costs, save military flying hours and flight crews for higher priority 

missions, reduce military footprint, or provide flexible contract 

length/timing. DOD also stated that it is not an indication of a shortfall in 

the DOD outsize cargo capability or the CRAF program. However, as we 

reported, DOD used foreign-owned carriers flying AN-124 aircraft to move 

high priority outsized cargo (MRAPs) into Iraq instead of the organic fleet 

of C-5s and C-17s. We did not state that there was a shortfall in either the 

CRAF program or DOD outsized capability. Rather, we point out that, if 

DOD is to know whether there is a shortfall, gap, or redundancy in that 

capability, particularly given the addition of over 15,000 MRAPs, they 

would need to do a risk assessment. We continue to believe that a risk 

assessment of this issue would give DOD specific information that would 

help it shape future strategic transportation requirements. 

DOD partially agreed with the third part of our recommendation 

pertaining to the need to develop appropriate policies and procedures for 

mitigating any identified risks regarding the decline of charter passenger 

capability and lack of outsized cargo capability. DOD stated that U.S. 

Transportation Command is examining potential mitigation strategies for 

the declining U.S. passenger charter segment. However, during our review, 

we found no evidence that U.S. Transportation Command was developing 

policies and procedures to mitigate any risks associated with declining 

charter passenger capability and outsized cargo capability. DOD disagreed 

with the need to develop any mitigation strategies for an outsized cargo 

capability since CRAF is not intended to carry outsized cargo. As stated 

above, DOD’s use of foreign-owned carriers to move outsized MRAPs 

would lead us to believe that there might be a future need for policies and 

procedures to mitigate any shortfall or gap. 

DOD agreed that there is a need for comprehensive policy governing all of 

the CRAF program elements identified in our draft report. However, DOD 

did not identify what, if any, specific actions it would take in response to 

our recommendation. We encourage DOD to establish enforcement 

guidelines for CRAF business rules; objectives and measures of 

effectiveness for modernization; oversight mechanisms describing how 

Page 22 GAO-09-625 Military Airlift
 

peacetime business should be distributed; and mechanisms for 

information sharing. 

We are sending copies of this report to interested congressional 

committees; the Secretary of Defense; and the Under Secretary of Defense 

(Acquisition, Technology and Logistics). In addition, this report will be 

available at no charge on the GAO Web site at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (202) 512-8365 or solisw@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

William M. Solis 

of this report. Key contributors to this report are listed in appendix III. 

Director, Defense Capabilities and Management 

Page 23 GAO-09-625 Military Airlift
 

List of Committees 

The Honorable Carl Levin 

Chairman 

The Honorable John McCain 

Ranking Member 

Committee on Armed Services 

United States Senate 

The Honorable Ike Skelton 

Chairman 

The Honorable Howard McKeon 

Ranking Member 

Committee on Armed Services 

House of Representatives 

Page 24 GAO-09-625 Military Airlift
Appendix I: Recent Department of Defense 

Studies 

Page 25 GAO-09-625 

Appendix I: Recent Department of Defense 

Studies 

Sustaining the Civil Reserve Air Fleet (CRAF) Program, Institute for 

Defense Analyses, May 1, 2003. 

Economic Review of the Civil Reserve Air Fleet (CRAF) Program, 

Institute for Defense Analyses, December 15, 2007. 

Civil Reserve Air Fleet (CRAF) Study Report, Council for Logistics 

Research, July 13, 2008. 

Civil Reserve Air Fleet: Economics and Strategy, Institute for Defense 

Analyses, August 22, 2008. 

 Military Airlift 
Appendix II: Comments from the Department Appendix II: Comments from the Department of Defense 

of Defense 

Page 26 GAO-09-625 Military Airlift
Appendix II: Comments from the Department 

of Defense 

Page 27 GAO-09-625 Military Airlift
Appendix II: Comments from the Department 

of Defense 

Page 28 GAO-09-625 Military Airlift
Appendix III: GAO

A

 Contact and Staff 

cknowledgments 

Page 29 GAO-09-625 

Appendix III: GAO Contact and Staff 

Acknowledgments 

William M. Solis, (202) 512-8365 or solisw@gao.gov 

In addition to the contact named above, Ann Borseth, Assistant Director; 

Renee Brown; Jeremy Hawk; Jeffrey R. Hubbard, analyst-in-charge; Mae 

Jones; Karen Thornton; and Steve Woods made key contributions to this 

report. 

GAO Contact 

Staff 

Acknowledgments 

 Military Airlift 
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(351306) Page 30 GAO-09-625 Military Airlift
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