A lift for CRAF?
A LIFT FOR CRAF?
The Defense Department anticipates a substantial decrease in its use of the
Civil Reserve Air Fleet (CRAF) once Operations Iraqi Freedom and Enduring
Freedom conclude. CRAF, initiated in the 1980s and first activated during the
Gulf War in 1990, is designed to support DoD airlift requirements in emergencies.
By Peter A. Buxbaum
The military operations in Afghanistan and Iraq, and their foreseeable, eventual drawdown, have created a dilemma for the Department of Defense when it comes to planning future airlift capacity. Not surprisingly, DoD has made substantial use of the Civil Reserve Air Fleet as part of those Middle East operations, with DoD expenditures for commercial airlift services between 2002 and 2006 quadrupling over the average of the previous five years. Equally unsurprising is the fact that DoD anticipates a substantial decrease in the need for commercial airlift services once those operations wind down.
The Civil Reserve Air Fleet (CRAF), initiated in the 1980s and first activated during the Gulf war in 1990, is designed to support DoD airlift requirements in emergencies. Commercial airlines contractually pledge aircraft to the CRAF and the military calls upon them when the need for airlift exceeds the capability of military aircraft. To assure the United States of adequate airlift reserves, the government, as an incentive to the commercial carriers, makes peacetime airlift business available to civilian airlines that obligate aircraft to the CRAF.
The problem DoD now faces is how to continue to incentivize carriers to participate in the CRAF program, once the need for CRAF services diminishes. A proposal DoD submitted as part of its fiscal year 2008 budget request would allow the department to guarantee CRAF carriers more business at the beginning of a fiscal year than is currently authorized.
There are other problems associated with the CRAF’s future role. DoD is currently undertaking or considering acquisitions and refurbishments to augment its organic airlift fleet. Increased reliance on CRAF for everyday DoD airlift needs and not just to provide surge capacity, as has been the case in the past few years, is one option under consideration. But commercial aircraft are less versatile than their military cousins, especially when it comes to servicing remote areas. The future size and role of the CRAF and the continuing debate over enhancing the U.S. military’s organic airlift capacity represents a balancing act with both fiscal and operational implications.
What DoD has done to remedy its immediate CRAF dilemma—the anticipated reduction in the need for CRAF services—is to request the authority to change the method it uses to calculate the annual guaranteed level of business for CRAF carriers. The current CRAF program is divided into a “fixed buy,” based on DoD’s known needs for airlift services during the coming year, and an “expansion buy,” to cover additional requirements as they arise. Currently, the Pentagon’s guarantee covers the fixed-buy portion of the CRAF program, which is based on firmly known, well-established needs.
Under the new proposal, the guaranteed level of business would be based on forecast, as opposed to firm, needs. This guarantee would be capped at 80 percent of the annual average expenditures of airlift during the prior five-year period, with unusually high demand years omitted. “Under the proposal,” noted a report released in October by the Congressional Budget Office, “the guaranteed level might include funds that would previously have been disbursed as part of an expansion buy.”
This raises the question whether the government could obligate itself to pay for services that will not be rendered. “There will no risk to the government in doing that,” asserted Ron Priddy, the former president of the National Air Carriers Association, a Washington, D.C.-based industry group. “The program is scored in the fiscal year 2008 budget as a zero increase. That tells you right away that DoD does not believe it is faced with significant risk.”
The reason for the low level of risk, in Priddy’s view, is that the military always has been extremely conservative in assessing its known needs for CRAF airlift. “In the past, they placed only about 15 percent of their ultimate requirements in the fixed portion of the contract,” he said.
“That means that 85 percent came as a surprise to industry, and that made it difficulty to have aircraft and crews” at the ready.
The proposed new formula will actually allow DoD to be a little less conservative in making its CRAF commitments, according to Priddy, which will be a boon to industry because it will be able to plan better. “But we will never get to point where have more than 70 percent of the final requirement in the fixed buy,” he said.
In other words, while the government may end up guaranteeing a higher level of business to carriers under the new formula, its overall CRAF requirements will always exceed forecast levels.
The CBO examined the issue from the perspective of how the potential increase in the guaranteed portion of DoD’s airlift business might affect the U.S. air transportation industry and the military’s ability to attract participants to the CRAF program. The CBO found that although DoD’s current use of commercial airlift services is at an historic high, that use is still small in relation to the overall size of the nation’s air transportation industry.
“U.S. air carriers’ revenues from DoD’s cargo business in 2005 were less than 5 percent of carriers’ total cargo revenues in that year, and their revenues from DoD’s passenger business were less than 2 percent of total passenger revenues,” the CBO report said.
Therefore, the CBO concluded, a decrease in DoD’s use of commercial airlift services will not have a large adverse effect on the air transportation industry. “Although cargo carriers have clearly seen a sizable increase recently in the business they receive from the government, there is no evidence that carriers have added aircraft to their fleets that they could not sustain if the government’s business were to diminish,” the report said. “That stability suggests that even those companies could accommodate a reduction in government-provided business.”
On the other hand, the substantial growth predicted for the air transportation industry in coming years calls into question whether higher guarantee levels would be adequate to attract sufficient numbers of air carriers to the CRAF program. “Air carriers may decide that the revenues available from DoD’s CRAF peacetime business are not worth the risk of disruption in their commercial operations if the reserve fleet is activated and carriers’ aircraft are diverted to support military operations,” the CBO report said. “If peacetime business opportunities become an insufficient incentive to encourage carriers to participate in CRAF, DoD may be forced to find other means of obtaining a surge airlift capacity.”
One possible way to keep CRAF carries in the game is to continue to use them for everyday DoD airlift needs. The CBO report noted that between 2002 and 2006 CRAF’s role was not limited to providing surge capacity. The trend toward shrinking the U.S. military’s OCONUS, or outside the continental United States, infrastructure, will put upward pressure on peacetime airlift requirements, according to a 2006 paper authored by Air Force Lieutenant Colonel Frank K. Benjamin for the Strategic Studies Institute of the Army War College.
“Especially as we drawdown our OCONUS infrastructure, we will increase reliance of the ability to project power from the continental U.S.,” Benjamin noted. “This is also essential as we rely on our CRAF partners. The threat of global terrorism also will alter how we use CRAF in the future. In order to reduce risks and preserve the viability of the CRAF program, DoD needs to begin to plan and prepare for using CRAF in such hostile scenarios.”
Maintaining a relatively high level of CRAF usage would have a cost-saving advantage, according to Christopher Bolkcom, a national defense specialist at the Congressional Research Service. “CRAF provides up to half of the nation’s long range airlift capability without the government having to buy additional aircraft, pay personnel costs, or maintain the aircraft during peacetime,” he said. Increasing the use of the CRAF is on the table to augment the airlift fleet, he added, especially as the Pentagon considers terminating production of the C-17, a strategic military airlifter.
While it appears that CRAF is capable of providing more capacity if required, “the efficacy of increasing the use of CRAF is a complicated calculation,” Bolkcom added.
“Using additional CRAF aircraft would reduce efficiency because of the type of cargo CRAF is modeled to carry,” said Benjamin’s paper. “Commercial aircraft take longer to unload than military aircraft and require special material handling equipment to be available at an off-loading base. Military aircraft, on the other hand, do not need specialized loading equipment because they are high-winged and fuselage is lower to the ground.”
“The primary shortcoming of CRAF aircraft is that they are incapable of moving outsized and oversized cargo,” added Bolkcom. “Commercial aircraft cannot employ austere runways and take longer to load and unload than military air lifters.” Bolkcom concludes, therefore, that CRAF is best suited to be used as “a safety valve or surge capability in airlift if more capability is required and no airlift production capability exists.”
Benjamin also comes down on the side of increasing the size of U.S. military’s organic long-range airlift fleet. This modernization effort includes avionics and engine modifications to the C-5 fleet and continued procurement of the C-17.
Still, the requirement for commercial airlift capacity is a substantial one, even in peacetime, according to Priddy. “Between 1996 and 2000, DoD spent $700 million per year or more on air transportation requirements with U.S. CRAF carriers,” he said. “Even at the height of peacetime, there are DoD logistics requirements for full-plane cargo and passenger operations, for example, to conduct exercises.”
Priddy acknowledged that there is a tension between the strategic choices of expanding organic airlift and making additional use of CRAF capacity. “But,” he added, “that is probably a healthy thing as far as the U.S. taxpayer is concerned.” ♦