Appendix F
Background Information on Re-engining the C-130

This appendix contains some of the information and analysis used in preparing the section on re-engining the C-130 in Chapter 3 of this report.

ENGINE OPTIONS AND ECONOMICS

The acquisition and support options for retrofitting the engines and props on selected C-130 aircraft range from, on the one hand, conventional military competitive purchase of engineering services and hardware and maintenance and support using indigenous assets to, on the other hand, full operating lease arrangements in which equipment is contractor owned and supported. A review of current military practices for acquiring propulsion systems in this class of aircraft indicates that a hybrid approach may be most suitable for some of the re-engining options reviewed here. For example, the engines for the V-22 and C-130J aircraft are purchased in the normal way and the engines are supported on an operating-time basis, with a contractor supplying labor and service for parts (Freestone, 2006). This approach is representative of current commercial practices in the civil airline business and is now also favored by the military services.

Evaluating the impact of savings associated with such maintenance contracting approaches is beyond the scope of this review since a portion of the savings comes from reducing the government payroll and relief from inventory and logistic requirements. The economic evaluations shown here are therefore based on conventional hardware and engineering service procurement and fuel savings. In addition to straightforward hardware purchase arrangements it may be possible to negotiate trading in the existing T56 engines, which have residual value in the marketplace. Such an arrangement was used in past Army engine upgrade programs. Also, no attempt has been made to evaluate the possible effect of eliminating a portion of the fleet and staffing requirements, which can result from increased aircraft performance, in turn a consequence of the reduced fuel consumption and improved operational capability offered by a re-engined fleet.

The first-order financial component of retrofit development, hardware acquisition, and fuel savings



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Improving the Efficiency of Engines for Large Nonfighter Aircraft Appendix F Background Information on Re-engining the C-130 This appendix contains some of the information and analysis used in preparing the section on re-engining the C-130 in Chapter 3 of this report. ENGINE OPTIONS AND ECONOMICS The acquisition and support options for retrofitting the engines and props on selected C-130 aircraft range from, on the one hand, conventional military competitive purchase of engineering services and hardware and maintenance and support using indigenous assets to, on the other hand, full operating lease arrangements in which equipment is contractor owned and supported. A review of current military practices for acquiring propulsion systems in this class of aircraft indicates that a hybrid approach may be most suitable for some of the re-engining options reviewed here. For example, the engines for the V-22 and C-130J aircraft are purchased in the normal way and the engines are supported on an operating-time basis, with a contractor supplying labor and service for parts (Freestone, 2006). This approach is representative of current commercial practices in the civil airline business and is now also favored by the military services. Evaluating the impact of savings associated with such maintenance contracting approaches is beyond the scope of this review since a portion of the savings comes from reducing the government payroll and relief from inventory and logistic requirements. The economic evaluations shown here are therefore based on conventional hardware and engineering service procurement and fuel savings. In addition to straightforward hardware purchase arrangements it may be possible to negotiate trading in the existing T56 engines, which have residual value in the marketplace. Such an arrangement was used in past Army engine upgrade programs. Also, no attempt has been made to evaluate the possible effect of eliminating a portion of the fleet and staffing requirements, which can result from increased aircraft performance, in turn a consequence of the reduced fuel consumption and improved operational capability offered by a re-engined fleet. The first-order financial component of retrofit development, hardware acquisition, and fuel savings

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Improving the Efficiency of Engines for Large Nonfighter Aircraft is shown in Table F-1. Note that the engine cost data shown here were supplied by the contractors and have not been through any form of procurement verification. A financial analysis using the information in Table F-1 and the cost assumptions shown in Table F-2 produce the cash flow trends shown in Figure F-1. The trends indicate that the most affordable option is an upgrade of the existing T56; the second most affordable is a retrofit with an existing derivative of the T56. The new AE 2100 is the least affordable based on the comparisons of maximum negative cash flow and payback time. However a focus on fuel savings relative to re-engining investment (Table F-3) indicates that the new engine option provides the greatest fuel savings for an initial investment. The financial analysis shown here is extracted from a single study to provide consistency (Egbert and York, 2006). That study did not include the PW150, but it should be noted that this engine offers an attractive alternative to the AE 2100 in that the engine is of approximately the same power level and is somewhat less expensive TABLE F-1 Components of Financial Evaluationa Costs T56/S3.5 T56/A427 AE 2100 PW150 Engine costs 0.433 0.753 1.0 0.965 Propeller costs (million $) 0.225 0.225 0.250 0.250 Nonrecurring costs of the re-engining (thousand $) 50 17 30 70 Nonrecurring costs of modifying the airframe (thousand $) 10 15 15 25b Annual fuel savings (million gal) 8 13 28 27 aEngine costs for the AE 2100 were provided from an average of contractor-provided data; costs for the other engines were calculated using the percentages in Egbert and York (2006). They are expressed here as relative to avoid the use of proprietary data; other costs and the fuel savings are from Egbert and York (2006) or other contractor data. bCommittee estimate. FIGURE F-1 Cash flow for C-130 re-engining options. SOURCE: Rolls-Royce.

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Improving the Efficiency of Engines for Large Nonfighter Aircraft TABLE F-2 Cost Assumptions   Base     Fuel burn/hr/engine (gal) 200     Fuel cost per gallon ($) 2.20     Maintenance cost/engine flight hour ($) 239     No. of aircraft 267     Annual flight hours 469     Normal overhaul (hours on wing) 2,426       T56-S3.5 T56-A427 AE 2100 Upgraded fleet   — — Fuel saving (%) 8 13 28 Maintenance savings (%) 30 40 50 Kit cost/engine (relative)a 0.5 0.67 1.00 Relative cost (%) 50 67 100 Program costs (million $)       Engine development 50 17 30 Flight qualification 5 10 10 Production preparation 5 5 5 Support preparation 2 2 2 Financial assumptions (%)       Discount rate 7 7 7 Fuel cost escalation 5 5 5 Maintenance escalation 5 5 5 Key output data (discounted $)       Upgrade rate (%) 19 19 19 Fuel saved (million gal) 111 181 390 Investment (million $) 187 351 743 Fuel cost savings (million $) 204 331 714 Maintenance savings (million $) 416 554 693 Net present value (million $) 432 535 664 Max negative cashflow (million $) (109) (203) (503) aCosts are expressed here as relative to avoid the use of proprietary data. SOURCE: Rolls-Royce. TABLE F-3 Fuel Savings Relative to Investments   T56-S3.5 T56-A427 AE 2100 PW150 Annual fuel savings (million $) 8.04 13.06 28.13 27 Fuel savings (gal/yr/million $ [nonrecurring cost]) 140,992 384,100 598,467 280,000 SOURCE: Egbert and York (2006).

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Improving the Efficiency of Engines for Large Nonfighter Aircraft and lighter than the AE 2100 (Croswell, 2006). The fuel consumption rate of the PW150 is slightly higher than that of the AE 2100. A more detailed study including installation, operational, and financial analysis is needed to make a selection between these two candidates. REFERENCES Unpublished Bennett Croswell, Vice President for Military Development Programs, Pratt & Whitney, “Pratt & Whitney presentation,” Presentation to the committee on May 24, 2006. Norm Egbert, Vice President for Engineering and Technology, and Ron York, Vice President for Special Projects, Rolls-Royce, “Rolls-Royce presentation,” Presentation to the committee on May 24, 2006. Paul Freestone, Vice President and Customer Business Executive, Rolls-Royce, “Commercial airlines business transactions,” Presentation to the committee on June 13, 2006.