The Air Force KC-767 Lease Proposal: Key Issues for Congress

The Air Force wishes to replace its KC-135E aircraft by leasing 100 new Boeing KC-767 tankers. The Air Force indicates that leasing is preferred because it will result in faster deliveries than outright purchasing. Air Force leaders argue that a lease will allow them to husband scarce procurement dollars by making a small down payment. Although Congress authorized the proposed lease in the FY2002 DOD Appropriations Act, it stipulated that the defense oversight committees must approve the lease - only the Senate Armed Services Committee has yet to approve. The lease proposal has been controversial and issues raised thus far include Whether there is an urgent need to replace the KC-135 fleet. The Air Force states that replacing the KC-135 is urgent, citing high costs, aircraft vulnerability to catastrophic problems, and the imminent closing of the 767 production line. Opponents of the lease state that operating costs are controllable and will be far lower than the overall costs of leasing the 767 that the vulnerability is no more than depicted in a 2-year old study which the Air Force found acceptable and that the 767 production line is viable until 2006-2008.