Civil Reserve Air Fleet (CRAF)

Civil Reserve Air Fleet (CRAF)
Updated April 25, 2008
William Knight and Christopher Bolkcom
Foreign Affairs, Defense, and Trade Division

Civil Reserve Air Fleet (CRAF)
Summary
The Civil Reserve Air Fleet (CRAF) was created by executive order in 1951. As
a result, the Departments of Commerce (DOC) and Defense (DOD) formulated a
contingency plan to meet the nation’s airlift needs in times of crisis. When the
Department of Transportation (DOT) was created, it assumed DOC’s role in the
CRAF program, and today, DOD and DOT work together to manage the CRAF
program.
The CRAF supports DOD airlift requirements in emergencies when the need for
airlift exceeds the capability of the military aircraft fleet. All CRAF participants must
be U.S. carriers fully certified by the Federal Aviation Administration, and meet the
stringent standards of Federal Aviation Regulations pertaining to commercial
airlines.
The CRAF has three main segments: international, national, and aeromedical
evacuation. The international segment is further divided into the long-range and
short-range sections and the national segment into the domestic and Alaskan sections.
Assignment of aircraft to a segment depends on the nature of the requirement and the
performance characteristics needed.
The commercial airlines contractually pledge aircraft to the various segments
of CRAF, ready for activation when needed. To provide incentives for civil carriers
to commit aircraft to the CRAF program and to assure the United States of adequate
airlift reserves, the government makes peacetime airlift business available to civilian
airlines that obligate aircraft to the CRAF. DOD offers business through the
International Airlift Services.
CRAF presents benefits and opportunities for both DOD and U.S. airlines. By
all accounts it appears to be a symbiotic relationship. Yet, as circumstances change,
pressures and diverging interests may emerge that could bring changes to CRAF. A
number of factors may be considered when examining the future size, character and
role of CRAF. These factors include cost, other potential government / commercial
arrangements, potential change in DOD requirement for CRAF, and industrial base
or financial assistance to U.S. air carriers.
This report will be updated as events warrant.

Contents
In troduction ......................................................1
Background ......................................................1
CRAF Structure...............................................2
International Segment......................................2
National Segment..........................................2
Aeromedical Evacuation Segment.............................2
Contractual Relationship........................................2
Activation ....................................................3
CRAF Membership............................................3
Analysis: Potential Future of CRAF...................................5
Cost Factors..................................................5
Other Government / Commercial Arrangements......................6
Potential Changes in DOD’s Airlift Requirements and Force Structure....7
DOD Airlift Requirements...................................7
Potential C-17 Acquisition...................................9
BC-17 ...................................................9
KC-X Acquisition........................................10
Industrial Base/Financial Assistance to Air Carriers..................11
Summary of Recent Legislative Activity...............................12
FY2008 ....................................................12
FY2007 ....................................................12
FY2006 ....................................................12
Appendix A. FY2008 National Defense Authorization Act (P.L. 110-181),
Section 356..................................................13
Appendix B. FY2008 National Defense Authorization Act (P.L. 110-181),
Section 1046.................................................15
List of Figures
Figure 1. CRAF Requirements and Commitments........................8
List of Tables
Table 1. Airlines Participating in the Civil Reserve Air Fleet................4
Table 2. KC-135 and Potential KC-X Airlift Capabilities..................10
Table 3. Recent CRAF Participation..................................11

Civil Reserve Air Fleet (CRAF)
Introduction
The Civil Reserve Air Fleet (CRAF) was created by President Truman in 1951.¹
As a result, the Departments of Commerce (DOC) and Defense (DOD) formulated
a contingency plan to meet the nation’s airlift needs in times of crisis. When the
Department of Transportation (DOT) was created, it assumed DOC’s role in the
CRAF program, and today, DOD and DOT work together to manage the CRAF²
program. This report provides background, analyzes current issues, and
summarizes recent legislation for the CRAF.
Background
The CRAF supports DOD airlift requirements in emergencies when the need for
airlift exceeds the capacity of DOD’s organic airlift fleet. While DOD strategic airlift
aircraft are designed to carry outsized and oversized cargo,³ CRAF air carriers are
primarily expected to transport passengers and cargo pallets. All CRAF participants
must be U.S. carriers fully certified by the Federal Aviation Administration (FAA),
and meet the stringent standards of the Federal Aviation Regulations pertaining to
commercial airlines (Part 121). To join CRAF, a carrier must commit at least 30%
of its CRAF-capable passenger fleet, and 15% of its CRAF-capable cargo fleet.
Aircraft committed must be U.S. registered and air carriers must also commit and
maintain at least four complete crews for each aircraft in CRAF.⁴
Air Mobility Command (AMC) analysts implement a number of surveillance
initiatives to monitor the carrier’s safety record, operations and maintenance status,
contract performance, financial condition and management initiatives, summarizing
significant trends in a comprehensive review every six months. These initiatives are

¹ Executive Order No 10219, Federal Register 16, “Defining Certain Responsibilities of
Federal Agencies With Respect to Transportation and Storage.” March 2, 1951, p. 1004-

1005.

² Mary E. Chenoweth, “The Civil Reserve Air Fleet and Operation Desert Shield/Desert
Storm: Issues for the Future,” RAND, Santa Monica, CA, 1993. pp. 4-5.
³ “Outsized cargo” exceeds the dimensions of oversized cargo and requires the use of a C-5
or C-17 aircraft or surface transportation. “Oversized cargo” exceeds the dimensions of a
standard (463L) pallet, but is air transportable on the C-5, C-17, C-130, KC-10, and most
civilian contract cargo carriers. (Joint Publication 1-02, DOD Dictionary of Military and
Associated Terms, amended through October 17, 2007, pp. 401-402).
⁴ Civil Reserve Air Fleet (Fact Sheet), U.S. Air Force, July 2007, at
[http://www.af.mil/factsheets/factsheet.asp?id=173]

supplemented by an open flow of information on all contract carriers between AMC
and the FAA through established liaison officers.⁵
CRAF Structure
The CRAF has three main segments: international, national, and aeromedical
evacuation. The international segment is further divided into the long-range and
short-range sections, while the national segment is divided into the domestic and
Alaskan sections. Assignment of aircraft to a segment depends on the nature of the
requirement and the aircraft performance characteristics needed.⁶
International Segment. The long-range international section consists
commercial airliners capable of transoceanic operations. Medium-sized passenger
and cargo aircraft make up the short-range international section supporting near
offshore airlift requirements.
National Segment. The aircraft in the Alaskan section provide airlift within
U.S. Pacific Command’s area of responsibility, specific to Alaska needs. The
domestic section is designed to satisfy increased DOD airlift requirements in the
United States during an emergency.
Aeromedical Evacuation Segment. The aeromedical evacuation segment
assists in the evacuation of casualties from operational theaters to hospitals in the
continental United States. Kits containing litter stanchions, litters, and other
aeromedical equipment are used to convert civil Boeing 767 passenger aircraft into
air ambulances.
Contractual Relationship
The airlines contractually pledge aircraft to the various segments of CRAF,
ready for activation when needed. To provide incentives for civil carriers to commit
aircraft to the CRAF program and to assure the United States of adequate airlift
reserves, the government makes peacetime airlift business available to civilian
airlines that obligate aircraft to the CRAF through the International Airlift Services.⁷
For FY2007, the guaranteed portion of DOD’s CRAF contract was $379
million, while AMC expected to award $2.1 billion in additional business that were
not guaranteed.⁸ The Air Force announced $2.2 billion in CRAF contracts had been
let in FY2005.⁹ DOD let contracts worth $3.8 billion between FY1998 and

⁵ Ibid.
⁶ Ibid.
⁷ Civil Reserve Air Fleet (Fact Sheet), U.S. Air Force, July 2007.
⁸ Ibid.
⁹ “Air Force announces CRAF contracts valued at $2.2 billion.” (Release Number: 570905)
Air Force Print News Today. September 13, 2005.

FY2002:¹⁰ 1998, $646 million; 1999, $710 million; 2000, $629 million; 2001, $572
million; and 2002, $1,280 million.
Activation
Three stages of incremental activation allow for tailoring an airlift force suitable
for the contingency at hand.¹¹ The stages of activation are as follows:
^!Stage I — minor regional crises.
^!Stage II — major theater war.
^!Stage III — periods of national mobilization.
The commander, U.S. Transportation Command (TRANSCOM), with approval
of the Secretary of Defense, is the activation authority for all three stages of CRAF.
During a crisis, if the Air Force Air Mobility Command (AMC) has a need for
additional aircraft, it would request the TRANSCOM commander to take steps to
activate the appropriate CRAF stage. Each stage of the CRAF activation is only used
to the extent necessary to provide the amount of civil augmentation airlift needed by
DOD. When notified of call-up, the carrier response time to have its aircraft ready for
a CRAF mission is 24 to 48 hours after the mission is assigned by AMC. The air
carriers continue to operate and maintain the aircraft with their resources; however,
AMC controls the aircraft missions.¹²
CRAF has been formally activated on two separate occasions over the
program’s 57-year history. The first instance occurred for Operations Desert
Shield/Storm from August 18, 1990, through May 24, 1991, and included long-range
international passenger and cargo segments up to Stage II. During Operation Desert
Storm, CRAF airlines executed 5,460 missions transporting 726,000 passengers and
230,000 tons of cargo at a cost of $1.4 billion. The second activation, during
Operation Iraqi Freedom, lasted from February 8, 2003 through June 18, 2003, and
included the long-range international passenger segment up to Stage 1 — long-range
cargo requirements were met organically or with voluntary commercial contracts.¹³
CRAF Membership
As of March 2008, 35 carriers with 1,262 aircraft were enrolled in the CRAF.
This includes 1,172 aircraft in the international segment (905 long-range and 267

¹⁰ Military Readiness. Civil Reserve Air Fleet Can Respond as Planned, but Incentives May
Need Revamping. General Accounting Office (GAO-03-278) December 2002. p.15.
¹¹ Civil Reserve Air Fleet (Fact Sheet), U.S. Air Force, July 2007.
¹² Ibid.
¹³ Chuck Roberts, Master Sergeant, USAF, “Civil Reserve Air Fleet Stage I Activates for
Only the Second Time in History,” Airman, April 2003, at [http://www.af.mil/news/
airman/0403/world7.html ].

short-range), 40 aircraft in the national segment, and 50 aircraft in the aeromedical
evacuation segments.¹⁴ Table 1 summarizes current CRAF members:
Table 1. Airlines Participating in the Civil Reserve Air Fleet
International Segment
Long Range SectionShort Range Section
ABX AirKalitta AirAlaska Airlines
Air Transport Intl.Murray AirAmerican Airlines
American AirlinesNorth American AirlinesATA Airlines^a
ATA Airlines^aNorthwest AirlinesChampion Air^b
Arrow AirOmni InternationalDelta Airlines
Atlas AirPolar Air CargoDHL Airways
Continental AirlinesRyan Intl. AirlinesJet Blue Airways
Delta Air LinesSouthern AirLynden Air Cargo
DHL AirwaysUnited AirlinesMiami Air International
Evergreen InternationalUnited Parcel ServiceNorthern Air Cargo
FEDEX AirlinesUS AirwaysNorthwest Airlines
Gemini Air CargoWorld AirwaysSun Country
National Segment
Domestic SectionAlaska Section
Air Trans AirwaysMidwest AirlinesLynden Air Cargo
Frontier AirlinesSouthwest AirlinesNorthern Air Cargo
Aeromedical Evacuation Segment
Delta Air LinesUnited AirlinesUS Airways
^Source:^D^e^p^a^r^t^m^e^nt^o^f^T^r^aⁿ^sp^o^r^t^a^tⁱ^o^{n w}^hⁱ^c^{h i}^ssue^s^up^d^a^t^e^{s m}^o^nt^hl^y^.
^{a. A}^T^A^Aⁱ^rlⁱⁿ^es^di^s^c^on^tⁱⁿ^u^e^d^operatⁱ^oⁿ^s^an^d^fⁱ^l^e^f^o^{r ban}^k^r^u^p^t^c^y^prot^ectⁱ^oⁿ^uⁿ^d^{er C}^h^apt^e^{r 11 on}^A^p^ri^l
^{2, 2008, res}^u^ltin^gⁱⁿ^th^{e los}^s^of³¹^aircraf^t^{to C}^R^A^{F. See on}^lin^{e at [h}^ttp://^www.^a^t^a^.^c^o^m/^a^b^o^u^t^_
^at^a/ⁿ^e^w^s^/^0080403.pdf^].
^{b. C}^h^am^pion^Aⁱ^{r plan}^s^{to dis}^c^on^tin^u^e^f^lig^h^t^operation^s^on^May^{31, 2008 res}^u^ltin^gⁱⁿ^t^h^{e los}^s^of⁶
^aⁱ^r^c^r^a^f^t^t^o^C^R^A^F^.^S^e^e^oⁿ^lⁱⁿ^e^a^t^[^h^t^t^p^:^/^/^www.^c^h^a^m^pⁱ^oⁿ^aⁱ^r^.^c^o^m/^P^r^e^s^s^R^o^o^m^.^a^s^p^?^P^r^e^s^s^R^e^l^e^a^s^e
^ID^=21].

¹⁴ Michael Lowder, Letter to CRAF Program Participants, Enclosure 1, March 11, 2008, at
[http://www.dot.gov/ost/oet/craf/CR0308.xls]

Analysis: Potential Future of CRAF
CRAF presents benefits and opportunities for both the DOD and the U.S. airline
industry — by all accounts it appears to be a symbiotic relationship. Yet, as
circumstances change, pressures and diverging interests may emerge that could bring
changes to CRAF.
Cost Factors
The primary benefit that CRAF imparts to DOD is its relatively low cost when
compared to procuring and maintaining a larger organic fleet. For example, a 1996
Government Accountability Office (GAO) report noted that CRAF “provides up to
half of the nation’s strategic airlift capability without the government having to buy
additional aircraft, pay personnel costs, or maintain the aircraft during peacetime”¹⁵
— all factors that remain relevant today.
While CRAF is relatively inexpensive, some may point out that commercial
aircraft have operational limitations when compared to DOD’s organic airlift fleet.
For example, commercial aircraft cannot carry outsized cargo, conduct special
missions such as airdrop, or support special operations forces. Also, commercial
aircraft tend to congest airfields because of longer ground times resulting from a lack
of roll on/roll off capability and reduced ramp maneuverability. Further, potential
hostile fire effectively deters civilian crews from entering combat zones. However,
commercial aircraft typically have longer range, and are optimized to efficiently
transport passengers and cargo pallets.¹⁶ GAO references the use of CRAF during
Operation Desert Storm to illustrate CRAF’s cost advantages:
The use of CRAF aircraft during an activation is not free — DOD pays rates
based on weighted average carrier costs — but the cost is minimal in comparison
to the costs of acquiring and supporting aircraft, paying and training aircrew, and
other expenses of maintaining standby military airlift capability. AMC paid the
carriers about $1.5 billion for using their aircraft during the operation.
Purchasing additional military aircraft to provide similar capability would cost
from $15 to $50 billion, according to Air Force officials, depending on¹⁷
assumptions used for aircraft replacement cost.
A RAND study (Finding the Right Mix of Military and Civil Airlift, Issues and
Implications) also includes a discussion of the cost-effectiveness of CRAF:
For a very small cost, the DOD has had on call a very substantial airlift capacity.
Replacing CRAF’s 1992 Stage II capability with military-style transports would
have cost the DOD about $1 billion annually (1992 dollars) over the past several

¹⁵ GAO/NSIAD-96-125, “Military Airlift: Observations on the Civil Reserve Air Fleet
Program,” March 1996, p. 2, at [http://www.gao.gov/archive/1996/ns96125.pdf].
¹⁶ Robert C. Owen, Professor, Embry-Riddle Aeronautical University-Daytona Beach, FL,
“Transport Trade-offs,” written in response to a previous letter to the editor in
“Correspondence,” Aviation Week and Space Technology, October 8, 2007, p. 8.
¹⁷ Ibid., p. 7.

decades. Replacing the Stage III capability would have cost about $3 billion¹⁸
annually.
The RAND analysis points out that to have adequate airlift for a major crisis,
DOD maintains a military airlift fleet with a total capacity four to five times greater
than the average daily use. Costs associated with acquiring and maintaining this
excess airlift capability must be routinely incurred, even if the full capacity is rarely
used.
As DOD’s procurement and operations and maintenance accounts come under
increasing pressure, it may appear attractive to increase the size of CRAF in lieu of
procuring and operating a certain fraction of the Air Force strategic airlift fleet.
Recent events may suggest that a growing use of commercial aircraft for every-day
DOD needs is already in evidence. In January 2005, for example, it was reported that
commercial airlines moved twice as many U.S. troops overseas as they moved in¹⁹
January 2004.
Contracting with air carriers to commit their aircraft to wartime needs is
cheaper, in a sense, than purchasing and operating additional Air Force cargo aircraft.
However, CRAF is not free, and it costs more once activated. RAND points out that:
Although holding reserve capacity in the CRAF is far more cost effective than
holding the reserve in the military airlift fleet, the government has a financial
incentive to use its own resources (for which it has already committed funds) in
a crisis to the extent that they are conveniently available, rather than give²⁰
additional business to CRAF carriers.
Other Government / Commercial Arrangements
CRAF is not the only means by which DOD transports troops by civil aircraft.
Through the General Services Administration (GSA), the U.S. government negotiates
and lets contracts to commercial airlines to fly government employees on official
U.S. government business. Federal employees, including DOD civilian and military
personnel, traveling on government business are obliged to fly with these contracted
airlines at the official government rate. DOD also charters commercial aircraft to
satisfy peacetime mobility needs.
In July 2006 the U.S. Central Command had initiated a pilot program —
“Commercial and Government Air Program” — to enlist commercial air cargo
carriers to deliver military supplies into Afghanistan and Iraq. The pilot program is
hoped to deliver up to 20% of DOD cargo to the region and to save DOD

¹⁸ Jean Gebman, et al. Finding the Right Mix of Military and Civil Airlift, Issues and
Implications. Volume 1. Executive Summary. RAND. Santa Monica, CA.1994. p. 21.
¹⁹ Micheline Maynard. “Airlines Moving More Troops This Month.” New York Times.
January 25, 2005.
²⁰ RAND op cit. p. 22.

approximately $9 million per month.²¹ DOD hopes to dramatically reduce its flight
costs by creating competition among carriers for the work, and by leveraging excess
cargo capacity on regularly scheduled commercial flights. This trial program could
be viewed as something of an alternative to CRAF, or an indication that more CRAF
would be welcome.
Potential Changes in DOD’s Airlift Requirements and Force
Structure
The increased scope and pace of military operations following the terrorist
attacks of September 11, 2001, have increased the Air Force’s mobility needs and²²
made commercial air carriers a more prominent component of this capability.
Potential changes in DOD’s strategic airlift requirements and air mobility force²³
structure may affect the CRAF program.
DOD Airlift Requirements. DOD periodically examines the state of its
current air mobility fleet and quantifies future airlift requirements to determine
whether current force structure is sufficient to meet the President’s national security
strategy. DOD’s most recent air mobility requirements study, Mobility Capability
Study (MCS), was completed in December 2005. However, during congressional
testimony, General Arthur L. Lichte, Commander of the Air Force’s Air Mobility
Command, pointed to changes that have occurred since the MCS was completed that
include the increase of 92,000 ground forces, the repositioning of DOD force
structure overseas, and the growth of the Army’s Future Combat System.²⁴ Further,
DOD has reduced the number of C-5 Galaxies planned for upgrade with new engines
and other enhancements that were expected to bolster capability of the C-5 fleet to
levels required by MCS-2005. As a result, General Lichte stated that the current
program of record for the Air Force’s strategic airlift fleet of C-5s and C-17s falls
short of the organic strategic airlift capability of 33.95 million ton miles day
(MTM/D) requirement.²⁵
The MCS called for the same level of CRAF contribution to total airlift
capabilities (20.5 million ton miles per day of the overall 54.5 million ton miles per

²¹ Jason Sherman. “CENTCOM Taps Commercial Air Carriers to Cut Iraq Cargo Costs.”
Inside the Air Force. July 21, 2006.
²² See for example, Cynthia Di Pasquale. “Pentagon Studies CRAF Sustainability and
Incentives to Industry.”Inside the Air Force. October 8, 2004.
²³ See CRS Report RL34264, Strategic Airlift Modernization: Analysis of C-5
Modernization and C-17 Acquisition Issues, by William Knight and Christopher Bolkcom
for more information.
²⁴ Gen. Arthur L. Lichte (USAF), Written Statement, Hearing on United States
Transportation Command Posture and Air Force Mobility Aircraft Programs, Subcommittee
on Air and Land Forces, House Armed Services Committee, April 1, 2008, p. 8.
²⁵ Ibid, p.4.

day objective) as required in the prior study.²⁶ However, DOD’s projected use of
CRAF to fulfill total airlift needs has increased from roughly 12 MTM/D in the late
1980s to roughly 20 MTM/D in 2005. Further, this increase in capacity has occurred
gradually, and many view DOD’s requirement for CRAF as being stable over this 19-
year span. As Figure 1 indicates, commercial aircraft committed to CRAF exceed
DOD requirements. Thus, any foreseeable increases in CRAF requirements are
unlikely to result in shortfalls of commercial aircraft committed to CRAF.
Figure 1. CRAF Requirements and Commitments

^Source:^Aⁱ^{r F}^o^{rce Mag}^aziⁿ^e^{, F}^e^bru^a^ry^{2003, p. 28.}
²⁶ Unlike previous mobility studies, DOD’s Mobility Capabilities Study 2005 did not provide
a specific quantitative estimate of airlift requirements. Some have asserted that this
omission reduces the value of the MCS and have called for another, requirements-driven
study.

Potential C-17 Acquisition. Some favor acquisition of additional C-17s²⁷
to meet potential current and future strategic airlift requirement shortfalls. For
example, in March 2008, General Norton A. Schwartz, Commander of U.S.
Transportation Command, stated that based on the C-5 Reliability Enhancement and
Re-engining Program being reduced and recertified by DOD, he believes DOD needs
a fleet of 111 C-5s and 205 C-17s.²⁸ Further, the Air Force’s FY2009 Unfunded²⁹
Priority List contained a request for 15 additional C-17s. In contrast, the
Administration’s FY2009 budget request did not contain funding for new C-17s, nor³⁰
did it request funding to close the C-17 production line. However, during
congressional testimony, Gen. Schwartz cautioned that too large of an organic airlift
fleet could potentially hurt the CRAF program in the future when he stated,
One of the things that you hold me accountable for is sort of maintaining the
balance between the organic fleet and the commercial capability. And as I
mentioned in my opening remarks, I caution about overbuilding the organic fleet;
because if that occurs, it can competes in peace time with that preference cargo,
the incentives that we offer our commercial partners. And so that’s one of the³¹
reasons that I believe 205 is the right number of C-17s.
BC-17. Because Air Force budget limitations make additional large-scale
procurement of C-17s difficult to fund, some have suggested the design of a
commercial version of the C-17 aircraft (BC-17) that might become part of the CRAF
fleet. However, is there sufficient market for these aircraft to be commercially
viable? In May of 2007, Boeing’s C-17 Program Manager, Dave Bowman, stated,³²
“we have several customers with money that have given us requests for proposals.”
Some industry studies suggest that a commercial market for up to 10 C-17s may exist
for use in heavy industry, mining, or similar endeavors, while Boeing believes there
is market potential of “upwards of 100 aircraft.”³³ On the other hand, at present,
there are no orders for a commercial variant of the C-17.

²⁷ See CRS Report RS22763, Military Airlift: C-17 Program Background, by William
Knight and Christopher Bolkcom for more information about the C-17.
²⁸ Transcript from the Hearing of the Senate Armed Services Subcommittee on Seapower
on Fiscal Year 2009 Budget for the Department of Defense Strategic Lift Programs, March

12, 2008 obtained through [http://www.cq.com].

²⁹ “FY2009 Unfunded Requirements List,” U.S. Air Force, SAF/FMB, Budget and
Appropriations Liaison Office, February 2008, p. 2, at [http://dailyreport.afa.org/
NR/rdonlyr es/BAD928B9-0927-4628-BE 43-14992CB464C1/0/FY09URL.pdf].
³⁰ Marc V. Schanz, “The C-17 and the Airlift Question,” Daily Report, Air Force Magazine,
February 6, 2008, at [http://dailyreport.afa.org/AFA/Features/modernization/
box020608airlift.htm] .
³¹ Transcript from the Hearing of the Senate Armed Services Subcommittee on Seapower
on Fiscal Year 2009 Budget for the Department of Defense Strategic Lift Programs, March

12, 2008 obtained through [http://www.cq.com].

³² Guy Norris, online at Flightglobal.com, May 23, 2007.
³³ Ibid.

KC-X Acquisition. Acquisition decisions regarding KC-X, the Air Force’s
next generation tanker program, may also affect future DOD CRAF needs and use.³⁴
Both competitors for the KC-X program, the Northrop Grumman KC-30 based on
the Airbus 330-200 and the KC-767 based on Boeing’s 767-200, could add airlift
capability compared to the KC-135s they are envisioned to replace. Table 2
summarizes the airlift capabilities of the KC-135 and potential KC-X replacements.
Table 2. KC-135 and Potential KC-X Airlift Capabilities
KC-135 KC-30 K C-767
Passengers 54 226 200
Pallets63219
Defensive SystemsNoPlannedPlanned
^Source:^U^S^A^F^{, N}^o^rt^h^r^o^p^G^r^um^m^aⁿ^an^{d Boei}ⁿ^g^.^K^C^-^{135 i}ⁿ^f^o^rm^atⁱ^oⁿ^deri^v^e^{d f}^r^om^K^C^-¹³⁵
^S^t^r^a^t^o^t^aⁿ^k^e^r^F^a^c^t^S^h^e^e^t^,^[^h^t^t^p^:^/^/^www.^a^f^.^m^il/f^acts^h^eets^/^f^acts^h^eet.as^p^?ⁱ^{d=110], an}^{d th}^{e A}ⁱ^{r Force}
^H^aⁿ^dbook^2007.
Like their commercial counterparts, potential KC-X tankers will have limited
oversized cargo capability, but a significant capability to transport passengers and
cargo pallets. Thus, as the Air Force’s KC-X tanker fleet potentially grows, DOD’s
day-to-day need for commercial airlift that participants in the CRAF program provide
could potentially be reduced. However, because most tankers could be needed to
perform air refueling during a potential crisis, DOD would likely still rely on the
CRAF program to meet surges in airlift demand.
On February 29, 2008, the Air Force awarded the KC-X contract to Northrop
Grumman. The initial $12.1 billion KC-X contract provides for the purchase the first
68 KC-45s³⁵ of the anticipated 179 aircraft.³⁶ On March 11, 2008, Boeing protested
the Air Force’s decision to the Government Accountability Office (GAO).³⁷ GAO
has 100 days to evaluate the protest.³⁸

³⁴ See CRS Report RL34398, Air Force Air Refueling: The KC-X Acquisition Program, by
William Knight and Christopher Bolkcom.
³⁵ The Air Force plans to designate its KC-X tanker as the KC-45A.
³⁶ “Tanker Contract Award Announced,” Air Force Print News, February 29, 2008, online
at [http://www.af.mil/news/story.asp?id=123088392].
³⁷ Boeing News Release, “Boeing Protests U.S. Air Force Tanker Contract Award,” March

11, 2008, at [http://www.boeing.com/ids/globaltanker/news/2008/q1/ 080311b_nr.html].

³⁸ GAO Press Statement, “GAO Statement Regarding Protest Filed by Boeing Company with
the Government Accountability Office,” March 11, 2008, at [http://www.gao.gov/
press/pressstmt -boeing0311.pdf].

Industrial Base/Financial Assistance to Air Carriers
All major passenger and cargo carriers participate in CRAF.³⁹ This strong
participation can be inferred to reflect broad support for CRAF. The program is
voluntary, and it appears logical that if the airlines didn’t find participation to be in
their interest, they would not participate. Every indication suggests that U.S. air
carriers value CRAF and want to participate. Table 3 illustrates the growth in CRAF
participation over the last 10 years.
Table 3. Recent CRAF Participation
1998 2002 2005 2007 2008
Caries 3533403735
Aircraft 657 927 1,126 1,360 1,262
^Source:^D^e^part^m^eⁿ^t^s^of^D^e^f^eⁿ^s^{e an}^{d T}^r^an^s^port^a^tⁱ^oⁿ^.
Following the terrorist attacks of September 11, 2001, many U.S. commercial
air carriers struggled because of a lack of business and other factors. Today, rising
fuel prices continue to pose a threat to the commercial airline industry.⁴⁰ As
economic and financial conditions for commercial air carriers potentially worsen, the
benefit of CRAF for the commercial sector has been increasingly discussed. It may
be that if economic conditions remain difficult, pressure may build on DOD to use
more commercial airlift, not necessarily to satisfy DOD needs, but to support the
private sector.⁴¹ Also, some, including the DOT, have proposed changes to Federal
Aviation Administration (FAA) regulations that might potentially lead to increased
foreign investment in U.S. airlines, including those that participate in CRAF.⁴²
While some support the additional capital that foreign investment could bring to the
airline industry, others oppose the concept of allowing foreign corporations to yield
increased influence over a sector of the U.S. economy that makes a significant
contribution to our nation’s defense.

³⁹ United, American, Delta, Northwest, US Airways, Southwest, UPS, and FEDEX
respectively.
⁴⁰ Graham Bowley, “Frontier Airlines Files for Bankruptcy,” The New York Times, April 12,

2008, at [http://www.nytimes.com/2008/04/12/business/11cnd-frontier.html?

ex=1208577600&en=f41b5269883e5591&ei=5123&partner=BREIT BART ].
⁴¹ See for example Scott McCartney. “Flying Troops for the Pentagon Gives Airlines a
Financial Boost.” Wall Street Journal. May 14, 2003. Micheline Maynard. “Pentagon’s
War Needs Are a Lifeline for Airlines.” New York Times. December 26, 2003. Micheline
Maynard. “Pentagon’s Needs Offer Airlines a Lift.” New York Times. January 22, 2005.
⁴² See for example 70 Fed. Reg. 67,389 (November 7, 2005), a Notice of Proposed
Rulemaking (NPRM) seeking comments on a proposal to clarify the policy of requiring
“actual control” of a U.S. air carrier to be by a citizen of the United States.

Summary of Recent Legislative Activity
This section provides a summary of recent legislation regarding the Department
of Defense’s (DOD’s) Civil Reserve Air Fleet (CRAF) program.
FY2008
The FY2008 National Defense Authorization Act (NDAA) contained three
provisions that affected the CRAF (P.L. 110-181). First, Section 356 called for a
comprehensive and independent assessment of CRAF. This assessment is designed
to examine current and long-range issues associated with CRAF and make specific
recommendations for preserving and improving the program. The FY2008 NDAA
required a report to be delivered to congressional defense committee no later than
April 2008. An excerpt of Section 356 is provided at Appendix A.
Second, Section 378 of the FY2008 NDAA extended authorization of the
Aviation Insurance Program (AIP) from March 30, 2008, to December 30, 2103. As
part of the AIP, the FAA offers a non-premium insurance program to air carriers that
participate in the CRAF. The Congressional Budget Office estimated “that extending
the CRAF program through 2013 would have no significant budgetary impact.”⁴³
Third, Section 1046 called for a DOD study on the size and mix of the airlift
force to specifically include how the CRAF could potentially affect DOD’s airlift
fleet requirements. This report is expected to be completed by January 2009. An
excerpt of Section 1046 is provided at Appendix B. Many expect this study to
inform force structure decisions regarding the optimal mix of DOD’s organic air
mobility fleets and the CRAF.
FY2007
In FY2007, the Senate version of the FY2007 NDAA contained a provision
(sec. 1052) that would allow the Department of Defense to guarantee higher
minimum levels of business to U.S. Civil Reserve Air Fleet carriers than are currently
authorized by law. However, the provision was not adopted in the final legislation
(P.L. 109-364).
FY2006
Section 131 of the FY2006 NDAA contained a provision that required DOD to
conduct an analysis of inter-theater airlift capabilities to include the impact of the
CRAF on DOD’s inter-theater airlift force structure requirements (P.L. 109-163).

⁴³ Congressional Budget Office Cost Estimate, “H.R. 4986: National Defense Authorization
Act for Fiscal Year 2008,” January 25, 2008, p. 12.

Appendix A. FY2008 National Defense Authorization
Act (P.L. 110-181), Section 356
Section 356 of the Conference Report (H.Rept. 110-477, December 6, 2007)
to H.R. 1585 stated the following:
SEC. 356. INDEPENDENT ASSESSMENT OF CIVIL RESERVE AIR FLEET
VIABILITY
(a) Independent Assessment Required- The Secretary of Defense shall provide for
an independent assessment of the viability of the Civil Reserve Air Fleet to be
conducted by a federally-funded research and development center selected by the
Secretary.
(b) Contents of Assessment- The assessment required by subsection (a) shall include
each of the following:
(1) An assessment of the Civil Reserve Air Fleet as of the date of the enactment
of this Act, including an assessment of —
(A) the level of increased use of commercial assets to fulfill
Department of Defense transportation requirements as a result of the
increased global mobility requirements in response to the terrorist
attacks of September 11, 2001;
(B) the extent of charter air carrier participation in fulfilling increased
Department of Defense transportation requirements as a result of the
increased global mobility requirements in response to the terrorist
attacks of September 11, 2001;
(C) any policy of the Secretary of Defense to limit the percentage of
income a single air carrier participating in the Civil Reserve Air Fleet
may earn under contracts with the Secretary during any calendar year
and the effects of such policy on the air carrier industry in peacetime
and during periods during which the Armed Forces are deployed in
support of a contingency operation for which the Civil Reserve Air
Fleet is not activated; and
(D) any risks to the charter air carrier industry as a result of the
expansion of the industry in response to contingency operations
resulting in increased demand by the Department of Defense.
(2) A strategic assessment of the viability of the Civil Reserve Air Fleet that
compares such viability as of the date of the enactment of this Act with the
projected viability of the Civil Reserve Air Fleet 5, 10, and 15 years after the
date of the enactment of this Act, including for activations at each of stages 1,

2, and 3 —

(A) an examination of the requirements of the Department of Defense
for the Civil Reserve Air Fleet for the support of operational and
contingency plans, including any anticipated changes in the
Department’s organic airlift capacity, logistics concepts, and personnel
and training requirements;
(B) an assessment of air carrier participation in the Civil Reserve Air
Fleet; and
(C) a comparison between the requirements of the Department
described in subparagraph (A) and air carrier participation described
in subparagraph (B).

(3) An examination of any perceived barriers to Civil Reserve Air Fleet
viability, including —
(A) the operational planning system of the Civil Reserve Air Fleet;
(B) the reward system of the Civil Reserve Air Fleet;
(C) the long-term affordability of the Aviation War Risk Insurance
Program;
(D) the effect on United States air carriers operating overseas routes
during periods of Civil Reserve Air Fleet activation;
(E) increased foreign ownership of United States air carriers;
(F) increased operational costs during activation as a result of
hazardous duty pay, routing delays, and inefficiencies in cargo
handling by the Department of Defense;
(G) the effect of policy initiatives by the Secretary of Transportation
to encourage international code sharing and alliances; and
(H) the effect of limitations imposed by the Secretary of Defense to
limit commercial shipping options for certain routes and package sizes.
(4) Recommendations for improving the Civil Reserve Air Fleet program,
including an assessment of potential incentives for increasing participation in
the Civil Reserve Air Fleet program, including establishing a minimum annual
purchase amount during peacetime.
(c) Submission to Congress- Upon the completion of the assessment required under
subsection (a) and by not later than April 1, 2008, the Secretary shall submit to the
congressional defense committees a report on the assessment.
(d) Comptroller General Report- Not later than 90 days after the report is submitted
under subsection (c), the Comptroller General shall conduct a review of the assessment
required under subsection (a).

Appendix B. FY2008 National Defense
Authorization Act (P.L. 110-181), Section 1046
Section 1046 of the Conference Report (H.Rept. 110-477, December 6, 2007)
to H.R. 1585 stated the following:
SEC. 1046. STUDY ON SIZE AND MIX OF AIRLIFT FORCE.
(a) Study Required- The Secretary of Defense shall conduct a requirements-based study
on alternatives for the proper size and mix of fixed-wing intratheater and intertheater
airlift assets to meet the National Military Strategy for each of the following
timeframes: fiscal year 2012, 2018, and 2024. The study shall —
(1) focus on organic and commercially programmed airlift capabilities;
(2) analyze the full-spectrum lifecycle costs of the various alternatives for
organic models of each of the following aircraft: C-5A/B/C/M, C-17A, KC-X,
KC-10, KC-135R, C-130E/H/J, Joint Cargo Aircraft; and
(3) incorporate the augmentation capability, viability, and feasibility of the
Civil Reserve Air Fleet during activation stages I, II, and III.
(b) Use of FFRDC- The Secretary shall select, to carry out the study required by
subsection (a), a federally funded research and development center that has experience
and expertise in conducting similar studies.
(c) Study Plan- The study required by subsection (a) shall be carried out under a study
plan. The study plan shall be developed as follows:
(1) The center selected under subsection (b) shall develop the study plan and
shall, not later than 60 days after the date of enactment of this Act, submit the
study plan to the congressional defense committees, the Secretary, and the
Comptroller General of the United States.
(2) The Comptroller General shall review the study plan to determine whether
it is complete and objective, and whether it has any flaws or weaknesses in
scope or methodology, and shall, not later than 30 days after receiving the study
plan, submit to the Secretary and the center a report that contains the results of
that review and provides any recommendations that the Comptroller General
considers appropriate for improvements to the study plan.
(3) The center shall modify the study plan to incorporate the recommendations
under paragraph (2) and shall, not later than 45 days after receiving that report,
submit to the Secretary and the congressional defense committees a report on
those modifications. The report shall describe each modification and, if the
modifications do not incorporate one or more of the recommendations, shall
explain the reasons for not doing so.
(d) Elements of Study Plan- The study plan required by subsection (c) shall address, at
minimum, the following:
(1) A description of lift requirements and operating profiles for airlift aircraft
required to meet the National Military Strategy, including assumptions
regarding the following:

(A) Current and future military combat and support missions.
(B) The planned force structure growth of the military services.
(C) Potential changes in lift requirements, including the deployment of
the Future Combat Systems by the Army.
(D) New capability in airlift to be provided by the KC(X) aircraft and
the expected utilization of such capability, including its use in
intratheater lift.
(E) The utilization of intertheater lift aircraft in intratheater combat
mission support roles.
(F) The availability and application of Civil Reserve Air Fleet assets in
future military scenarios.
(G) Air mobility requirements associated with the Global Rebasing
Initiative of the Department of Defense.
(H) Air mobility requirements in support of worldwide peacekeeping
and humanitarian missions.
(I) Air mobility requirements in support of homeland defense and
national emergencies.
(J) The viability and capability of the Civil Reserve Air Fleet to
augment organic forces in both friendly and hostile environments.
(K) An assessment of the Civil Reserve Air Fleet to adequately
augment the organic fleet as it relates to commercial inventory
management restructuring in response to future commercial markets,
streamlining of operations, efficiency measures, or downsizing of the
participant.
(2) An evaluation of the state of the current airlift fleet of the Air Force,
including assessments of the following:
(A) The extent to which the increased use of airlift aircraft in on-going
operations is affecting the programmed service life of the aircraft of
that fleet.
(B) The adequacy of the current airlift force, including whether or not
a minimum of 299 strategic airlift aircraft for the Air Force is sufficient
to support future expeditionary combat and non-combat missions, as
well as domestic and training mission demands consistent with the
requirements of meeting the National Military Strategy.
(C) The optimal mix of C-5 and C-17 aircraft for the strategic airlift
fleet of the Air Force, to include the following:
(i) The cost-effectiveness of modernizing various iterations of
the C-5A and C-5B/C aircraft fleet versus procuring additional
C-17 aircraft.
(ii) The military capability, operational availability, usefulness,
and service life of the C-5A/B/C/M aircraft and the C-17

aircraft. Such an assessment shall examine appropriate metrics,
such as aircraft availability rates, departure rates, and mission
capable rates, in each of the following cases:
(I) Completion of the Avionics Modernization
Program and the Reliability Enhancement and Re-
engining Program.
(II) Partial completion of the Avionics Modernization
Program and the Reliability Enhancement and Re-
engining Program, with partial completion of either
such program being considered the point at which the
continued execution of each program is no longer
supported by the cost-effectiveness analysis.
(iii) At what specific fleet inventory for each organic aircraft,
to include air refueling aircraft used in the airlift role, would
it impede the ability of Civil Reserve Air Fleet participants to
remain a viable augmentation option.
(D) An analysis and assessment of the lessons that may be learned from
the experience of the Air Force in restarting the production line for the
C-5 aircraft after having closed the line for several years, and
recommendations for the actions that the Department of Defense
should take to ensure that the production line for the C-17 aircraft
could be restarted if necessary, including —
(i) an analysis of the methods that were used and costs that
were incurred in closing and re-opening the production line for
the C-5 aircraft;
(ii) an assessment of the methods and actions that should be
employed and the expected costs and risks of closing and re-
opening the production line for the C-17 aircraft in view of
that experience.
Such analysis and assessment should deal with issues such as
production work force, production facilities, tooling, industrial base
suppliers, contractor logistics support versus organic maintenance, and
diminished manufacturing sources.
(E) Assessing the military capability, operational availability,
usefulness, service life and optimal mix of intra-theater airlift aircraft,
to include —
(i) the cost-effectiveness of procuring the Joint Cargo Aircraft
versus procuring additional C-130J or refurbishing C-130E/H
platforms to meet intra-theater airlift requirements of the
combatant commander and component commands; and
(ii) the cost-effectiveness of procuring additional C-17 aircraft
versus procuring additional C-130J platforms or refurbishing
C-130E/H platforms to meet intra-theater airlift requirements
of the combatant commander and component commands.
(3) Each analysis required by paragraph (2) shall include —

(A) a description of the assumptions and sensitivity analysis utilized in
the study regarding aircraft performances and cargo loading factors;
and
(B) a comprehensive statement of the data and assumptions utilized in
making the program life cycle cost estimates and a comparison of cost
and risk associated with the optimally mixed fleet of airlift aircraft
versus the program of record airlift aircraft fleet.
(e) Utilization of Other Studies- The study required by subsection (a) shall build upon
the results of the 2005 Mobility Capabilities Studies, the on-going Intra-theater Airlift
Fleet Mix Analysis, the Intra-theater Lift Capabilities Study, the Joint Future Theater
Airlift Capabilities Analysis, and other appropriate studies and analyses, such as Fleet
Viability Board Reports or special aircraft assessments. The study shall also include any
testing data collected on modernization, recapitalization, and upgrade efforts of current
organic aircraft.
(f) Collaboration With United States Transportation Command- In conducting the study
required by subsection (a) and preparing the report required by subsection (c)(3), the
center shall collaborate with the commander of the United States Transportation
Command.
(g) Collaboration With Cost Analysis Improvement Group- In conducting the study
required by subsection (a) and constructing the analysis required by subsection (a)(2),
the center shall collaborate with the Cost Analysis Improvement Group of the
Department of Defense.
(h) Report- Not later than January 10, 2009, the center selected under subsection (b)
shall submit to the Secretary and the congressional defense committees a report on the
study required by subsection (a). The report shall be submitted in unclassified form, but
shall include a classified annex.