..and now the Americans are offering, well Lockheed anyway,
http://www.canada.com/national/nationalpost/news/story.html?id=4c3af4c9-d5b9-401d-afad-56ffa1bfcc74&rfp=dta&page=1
Canada offered deal on planes
Military can lease new Hercules for cost of maintaining old ones
a journalist
CanWest News Service
Monday, March 28, 2005
OTTAWA - A U.S. aerospace giant says it can give Canada a deal on new transport planes, delivering the newest model C-130 Hercules to the air force for about what it costs to keep its older Hercules fleet flying.
If the Canadian Forces were to redirect the money now spent to maintain and operate its E-model Hercules fleet -- some of which are 40 years old -- it could finance the leasing of Hercules C-130Js, the latest generation of the aircraft, officials with Lockheed Martin proposed in a recent pitch to the federal government.
The Lockheed plan is the latest spin in an ongoing debate within military and industry circles over updating Canada's air transport fleet.
Over the years, the air force has made little headway in replacing its ageing Hercules, the backbone of the Canadian military's transport fleet. The Liberal government has been reluctant to pay for new planes, which could cost as much as $2-billion.
A proposal to buy new Boeing C-17 Globemaster transport jets was shot down by then-defence minister John McCallum in 2002 because of the cost of the huge aircraft, estimated at more than $200-million apiece.
But Boeing has now proposed a lease arrangement similar to its deal with Britain's Royal Air Force, which the company says would cost Canada nothing after taking into account the savings in scrapping the expensive-to-operate older Hercules.
Lockheed Martin also argues that leasing brand new C-130Js would mean no large up-front bill for the Canadian government. "How the lease is structured is entirely up to Canada," said Peter Simmons, a Lockheed Martin spokesman. "But it's a very cost-effective way of getting a very efficient fleet very quickly."
Similar arrangements, using money spent on maintaining older planes, could be used to purchase new Hercules aircraft outright, Mr. Simmons added.
However, critics say the C-130J is unreliable and not capable of doing the job -- a claim disputed by Lockheed Martin.
Mr. Simmons said his company's presentations on leasing or buying new C-130Js have been greeted favourably by the Canadian government and military. He noted there is a high level of concern about replacing the Hercules fleet. One study done by defence analysts warned that by 2008 the military could be without a means of transporting its troops and equipment if it does not begin replacing the Hercules soon.
"Canada has done yeoman's work in maintaining that fleet," Mr. Simmons said. "But ultimately, just pure, simple reality sets in and the aircraft will start grounding."
Canada operates 32 Hercules aircraft. Many have the distinction of recording the highest number of flying hours of any military Hercules in the world.
The Canadian Forces spends about $75-million a year on repairs, maintenance and the purchase of spare parts for its Hercules fleet. Another $25-million is spent on upgrades for the planes on items such as electrical and engine systems. The figures provided by the military are for the entire Hercules fleet and did not break out the costs to maintain the older aircraft, which have been plagued with cracks in their wings and other problems.
The C-130J has been the subject of several U.S. government reports that have questioned the plane's reliability. One report issued last year determined the aircraft is not capable of performing many of its planned missions.
Critics have also cited problems with the plane's engines, and there has been a move by the U.S. Congress to shut down the C-130J production line, but that is being reconsidered by the Bush administration.
Mr. Simmons said the reports questioning the C-130J's reliability were based on outdated information and that the airplanes used by the United States and Britain have been performing beyond expectations in Iraq and other overseas missions.
Other C-130Js are flying with the Australian and Italian air forces.
"The absolute proof is the reality, and the reality is that the aircraft is operating incredibly efficiently in theatre," Mr. Simmons said. "Now we're demonstrating its capability and what it can do, and it's speaking for itself."
