Episode 44: Air Force Engages Industry for New Air Mobility Solutions
The Elara Edge
Host: Scott King (SK)
SME: Gen (Ret) Jackie Van Ovost, Senior Principal Advisor at Elara Nova (JVO)
Lt Gen (Ret) Rick Moore, Executive Partner at Elara Nova (RM)
Lt Gen (Ret) Ty Thomas, Executive Partner at Elara Nova (TT)
00:02 – 01:27
For over 75 years, the United States Air Force has been able to deploy and sustain forces at a time and place of its choosing, but a series of converging challenges have undermined that ability. Key mobility platforms like the C-5 and C-17 are aging, parts are harder to come by and the long legs required to cover the Pacific theater consume flight hours faster, shortening the time between maintenance cycles. Meanwhile, integrating new capabilities to outpace an accelerating threat demands additional downtime the fleet can ill afford.
In response, the Air Force has initiated two efforts set against ambitious timelines. In June, the Air Force published a Request for Information to acquire a Next-Generation Airlift (or NGAL) platform to replace both the C-5 and C-17. At the same time, the Air Force is putting funds toward a new research and development program, Large Aircraft Survivability Systems (or LASS) to equip airlifters and aerial refuelers with their own defensive weapon systems.
Welcome to The Elara Edge! We have three guests today, here to discuss these efforts to revitalize and modernize the Air Force’s mobility fleet. First, we have retired General Jackie Van Ovost, a Senior Principal Advisor at Elara Nova and the former Commander of Air Force Mobility Command and U.S. Transportation Command.
Ma’am, welcome to the show!
01:27 – 01:29
(JVO): Thanks. Great to be here.
01:29 – 01:41
(SK): Also joining us is retired Lieutenant General Rick Moore. Now an Executive Partner at Elara Nova, General Moore retired as the Deputy Chief of Staff for Plans and Programs at U.S. Air Force Headquarters.
Sir, welcome to the show!
01:42 – 01:43
(RM): Thanks, Scott. Appreciate the invite.
01:44 – 01:59
(SK): And then we have retired Lieutenant General Jon “Ty” Thomas. General Thomas is also an Executive Partner at Elara Nova, and previously served as the Deputy Commander of Air Mobility Command and Pacific Air Forces.
Sir, thanks for taking the time to join us today!
02:00 – 02:01
(TT): Happy to be here, Scott.
02:02 – 02:22
(SK): Let’s start today’s discussion with the Air Force’s RFI for a Next Generation Airlift platform, or NGAL. The primary mobility platforms the Air Force uses for its airlift mission is currently the C-5 and C-17.
But what is the current status of those airlifters? And how has the threat landscape evolved to prompt the Air Force to put forward this RFI?
02:23 – 03:37
(RM): Yeah. So the C-5M fleet is a little bit challenged these days. The mission capable rate is in the high 30s. Right now, it’s about 37%. Without giving a specific number, the plans call for something dramatically higher than that, which means that the amount of C-5 capability and capacity that TRANSCOM counts on – it’s not there.
The C-17 fleet is faring a pretty good bit better. The C-17 MC rate is in the mid 70s. Right now it’s about 75%. That’s down about 7% from pre-COVID. And the C-17 MC rate seems to kind of be drifting down by about 1% a year. As the fleet ages, more parts get obsolete, it becomes more difficult to keep the supply chain intact as just technology leaves the C-17 behind.
So the plan from Air Mobility Command that you see in the Request for Information is for a single airplane to replace both of those. The C-5 replacements will start in about 2050, and the C-17 replacements should finish by about 2075. The plan is to have Next Gen Airlifter ready to fly by 2038, and initial operational capability by 2041.
That is quite far away if you consider that the C-5 now are languishing in the high 30s for mission capable rate.
03:38 – 04:57
(JVO): When we think about our ability to maneuver anywhere in the world and sustain operations for the joint force, the first thing you think about is air mobility.
Now, we have a lot of great other modal capabilities with sea and land. But I tell you, when I think about our most consequential theater in the Pacific, it is an air and sea fight. And we do not have the capabilities for airfields and road networks and even sea networks, if you will, and river networks that we had even in Europe.
So we cannot execute our national strategy without this capability. So it is critical that we spend the time to analyze what is the real requirement of the transformed force for maneuver and sustainment, and how are we going to supply that?
There are some great movement trying to get some funding for parts and sustainment to resurrect these airplanes and get them higher. But the bottom line is: this is the consequence of an aging fleet, the consequence of not recapping early and the consequence of old technology.
We’ll have an opportunity to talk about software and software defined and agile updates. But when we look at the declining MC rates, it is way too far out there. We just do not have a coherent strategy to get us, even if we can meet these accelerated timelines for the Next Generation Airlift.
04:58 – 05:35
(RM): Yeah and Scott you asked about how the threat landscape has evolved and how that impacts the air mobility fleet. We’ve been at war in the desert for 35 years now. We have not yet had to contend with contested lines of logistics. We’ve been able to move everything to and through Europe and on to the Middle East without our supply lines being contested.
That will almost assuredly not be the case in the event we find ourselves in conflict in the Pacific. The air mobility fleet that we have today is designed to protect itself from some threats, but its ability to to handle itself with truly contested supply supply lines – it’s just not there.
05:36 – 05:53
(TT): Scott, the one thought that I would add that comes to mind is so we remember our 21st chief of staff who used to talk about mobility as like oxygen. When you’re breathing, it’s there and you never even think about it until you don’t have it and then that’s all you think about. That’s what mobility is for and what it does.
05:54 – 06:01
(SK): And so how will the NGAL, as a single platform, be a solution for replacing both the C-5 and C-17?
06:02 – 07:00
(RM): I think you’re going to find that a single platform to replace the C-17 and the C-5 is likely to look a lot more like a C-17 than a C-5. And if you consider the distances that we have to operate over in the Pacific, the RFI called for just a marginal increase in range over the C-17. Then I think when you start looking at numbers: 274 airplanes is about what the RFI envisions to replace an equal-sized fleet, 222 C-17s and 52 C-5s.
I think you’re going to be challenged with an airplane with a similar cargo box to the C-17. Marginally more range to equal what we have in the two fleets today. The one thing that is the equalizer is the mission capable rate of the C-5. If you can have an airplane with a high mission capable rate, you can probably be okay there.
But the Pacific is a remarkably challenging environment to operate in. There are a few alternates. The legs are really, really long and the requirement for lift is really high.
07:01 – 08:19
(JVO): Can I add that US TRANSCOM does something called a Mobility Capability Requirement Study (MCRS), and that is being refreshed right now. And some of these requirements from the RFI look a lot like MCRS-16 in 2016.
You’re at 160,000 pounds, which is roughly when you think about maxing out a pallet at 10,000 pounds. You know, it’s 16 pounds pallets. C-17 has 18 and that 2500 nautical mile unrefueled range. And as we refresh the MCRS, we have to have a better understanding of what the joint force is going to be using. The entire joint force is transforming to do distributed operations.
So the 160,000 and the double-wide sounds like heavy armor. And we just need to make sure that as we’re moving munitions, moving drones and other things, that we’re actually creating a box and a capability that’s going to move that most effectively and provide options to the Combatant Commander. So I am looking forward to the MCRS as it develops out – and that’s a classified study.
But there should be some work done with industry to understand what the capabilities are and what the services to see what they’re developing and their concepts of operations out into the future.
08:20 – 08:37
(SK): Thank you, Ma’am. Now at the time of the RFI’s release, Air Force leaders indicated an opennes to having NGAL as a crewed or uncrewed platform. Or in other words, fully autonomous.
What are some of the advantages and disadvantages of using autonomous technologies for the airlift mission?
08:38 – 09:39
(JVO): From the COCOM perspective, I would say that autonomous capabilities are part of the mobility enterprise and must be.
It gives us an option in the fight to make a decision, like if this is optionally crewed to to not use a crew going forward for a particular hazard that’s out there. That said, these are not attritable airplanes, so we still have to have some defensive capability and the C2 architecture to support even autonomous airplanes like NGAL at that level is totally separate when you’re talking about something that’s moving 1,000 pounds.
But when you’re looking at NGAL, it’s really not meant to be attritable. So it does provide options. And we want to be able to get an airplane into a higher threat region without and do the mission when it makes sense from an autonomous standpoint.
Certainly, of course additional reps and sets. You could fly the airplane longer. You don’t have the crew. Not only are you not concerned about crew safety, but I’m not concerned about running them dry or running on a crew duty day. So you have more use out of it, but you want to use it in that capability when it makes the most sense.
09:40 – 10:26
(TT): Yeah, it doesn’t surprise me that they’re calling for that in the RFI. I mean, to some extent, though, especially the term optional, it almost puts you in the worst of all worlds in the sense that you’ve got to make design provisions for a full up crew, and that costs you weight, that costs you payload, that costs you fuel, costs you all kinds of things in the design of the aircraft while also needing to provision for the aircraft to operate autonomously with the digital backbone and all of the things that we have now with modern aircraft, it you should be able to insert that in.
But to be able to have both is going to increase the cost of the aircraft. And we should, carefully examine: do we need to have all that optionality? Industry will come back and say this is how you can do it. Ultimately it’s going to become a design requirement or not, and then that’ll drive trade-offs that occur.
10:27 – 11:06
(RM): We typically think of grey tails as cargo aircraft. But if you get into competition and then into conflict, gray tails, maybe the only way that you have to get troops all the way forward in the battle and an autonomous cargo aircraft there probably is a pretty fair amount of appetite for that.
When you start putting people on it and you start talking about moving passengers, even combat troops in an autonomous aircraft, I’m not sure we’re quite there yet that we’re willing to put a couple hundred folks on an airplane and send them off into the night without some folks in the cockpit that can recover if something goes wrong.
If nothing goes wrong, everything’s fine. But as soon as something does, then you have the potential for a very serious problem.
11:07 – 11:19
(SK): And General Thomas, given the cost challenges you mentioned, can you walk us through how an innovative concept like NGAL could be realistically funded and sustained – particularly in a congressional environment where continuing resolutions have become the norm?
11:20 – 13:42
(TT): Well, maybe I’ll build it up this way and just kind of get to a number. And I’ll start with Rick did a great job of laying out what’s in the recapitalization memo. Kind of the dates, key milestones at 2038, 2041, 2075. So if you look at that and if you just kind of set aside the front end developmental costs, which are consequential and big, but we can come back to that.
Starting with FY26 dollars, it’s probably an all up cost of an NGAL. I would argue about $350 million. That’s not just the airframe itself. That’s all the spares. That’s ground support equipment, that’s training systems. All the things to actually like this is a machine that’s a fielded capability, that’s got all the things that are necessary to last for the decades that we’re going to expect to do it.
Okay. So maybe you get a couple aircraft out of the developmental program and then your first squadron, let’s say Jackie’s successor says IOC is going to be one squadron of 12 airplanes. Okay. So you get to that at 2041. And then basically you’re making those airplanes all the way through about 2068 or so. And it’s about ten airplanes a year.
So it’s $3.5 billion FY26 a year. This is a $100 billion aircraft production program just in and of itself. If you push the developmental cost there in front of it, I venture it’s probably a $20 billion developmental program. If this is a full clean sheet design, not based on any commercial derivative or a modification of existing military assets.
And then you go back to what is life like in building a program and then defending it with OSD and then getting it over through the gates and the Hill to end up in an appropriation. This is going to scream having a multi-year. That would be the only way that you can have assurance that a program of this length, when it’s recapping at only ten airplanes a year is going to have the continuity that it requires.
And actually, if I’m in industry, ten airplanes a year is a really low rate. 12 airplanes minimum? Companies that are building tankers right now would like to go from the existing 15 to 18 or 24 because they know the efficiencies on the line that come from the higher production rates.
So to me, that’s just kind of the basic math. And there’s going to have to be a long commitment that locks in funds in the Air Force generally doesn’t like to do that if they don’t have to, because you want to maintain that budget flexibility because the programmer always has to create offsets.
13:43 – 15:12
(RM): I agree absolutely with Ty’s assessment. An optionally manned aircraft – that’s a marginal cost that you’re talking about. It’s not a question about whether that can fit in the budget. The highest risk for the NGAL program overall is the time when C-5 and C-17s are still flying and NGAL is in development. $20 billion is about what we spent on C-17 development in the late 80s.
And so development costs could actually be fairly substantially higher than that. Trying to fit all of that in the budget, that’s the highest risk to the program. If you wanted to de-risk the program, you would look outside the Air Force to see what kind of capacity absorbers are out there, so that you could start to bring the C-5 fleet down before NGAL starts to deliver, or certainly not a one-for-one tail replacement.
If the requirement is that NGAL and C-5 and then C-17 have to shake hands with each other one-for-one replacement, I think there’s great risk that that won’t even fit in the budget. You’ve got to find a way to bring down that spike of non-recurring engineering, NRE and C-17 ops and C-5 ops.
And if you’re going to start to bring the C-5 fleet down, we spend about a billion and a quarter dollars a year on C-5s. The real money is in the depot. It’s not in the airplanes. So what you have to do is figure out how you can let the fleet degrade gracefully without a depot, and let that be a shock absorber for the NRE for NGAL.
Then you have to use outside capacity to fill in the gap. Otherwise, I’m not convinced that NGAL actually fits in the Air Force budget.
15:13 – 16:59
(JVO): Absolutely, spot on for both of them. That bridge strategy is critical. There is no funding to bring the C-5 back up to where it needs to be. That really should be critically looked at. And what commercial capability is out there? What are we actually using the airplanes for?
As we remember during Afghanistan, we really focused on the C-17 in theater, and we use the C-5 around the globe to clean up issues. It performed well, but it still didn’t perform at the level that we had expected after we did that major modification to the airplanes, we made the revised C-5M.
Let me also go back to what Ty talked about with the respect to the acquisition strategy. Yeah, I would say more than 20 billion because of what we’re trying to do here and it is a clean sheet so far. There are some other thoughts about C-17s but pretty much just a clean sheet if you’re going to walk away from a tube and wing. But how we do it right? We all think, oh, it’s the magic button. Is it OTAs or using new acquisition strategies?
You know, maybe there’s a tweener out there where we can accelerate the development through another strategy. But that would take a handshake with industry certainly, and partnerships and consortiums to probably do that. And then, yes, we expect that when you have a hot production line that you can get efficiencies by accelerating it.
We see at a smaller level here with munitions and whatnot that we just some of the capacity issues, the materials issues, the second and third tier supplier issues, may be what really stops us from putting out something more than ten a year. And that’s what we absolutely have to do that.
And I agree a multi-year strategy. And you’re seeing it more with this administration really understanding we have to have a commitment to industry so that they will invest in what it takes, automation, the materials to produce faster so that we can get a better copy – one – and two – reduced risk on the bridge strategy.
17:00 – 17:12
(SK): Say the Air Force is able to overcome these budgetary challenges and deliver NGAL on these ambitious timelines with all the funding required: what would that NGAL capability look like in a theoretical future fight in the Pacific?
17:13 – 19:24
(JVO): The Pacific theater is the most operationally restrictive theater that we deal with. Whereas Europe is land and air, the Pacific is air and sea, and we just do not have the nodes, the multi-modal routes that we’ve defined over the years and years of dealing with NATO and then the logistics depth in Europe, and frankly, even in the Middle East right now, than what we what we have right now in the Pacific.
So I would say that as we’ve been talking about it as a huge theater. The challenge is not just distance. It is the logistics depth across that theater that really can bite us. And when I think about the 2500 unrefueled distance, certainly you can get from northern Australia to most of the first and second island chain, certainly from Japan down to the first and second chain.
We start talking about Alaska and Hawaii and the Konas. It’s going to require augmentation by tankers or some sort of a cross-load strategy with our commercial partners. And certainly we’re going to be depending on our allies and partners. They have some of the depth for what they need, but not for a major theater fight and that’s what we really have to be looking hard at.
So it’s not just an NGAL, it is the mobility enterprise system, which is air, land and sea. And we’re going to have to depend more on intra-theater sealift. So we’d have to resurrect some of the capabilities we have or use as a service with our commercial partners or joint ventures out into the Pacific.
I’m hoping that the MCRS that TRANSCOM is working on is going to help develop some of those concepts and put pressure on the services to deliver all of those capabilities so that the entire enterprise, which also has to be C2 fuzed in sensors and see the entire picture, that’s air land and sea mobilization capability, that they’re all together so that we can have options to move across different modes to meet the requirements.
And we’re going to use NGAL for what NGAL can exclusively do, which is that high threat area. And then we’re going to use all the rest of the capabilities so that we can keep NGAL focused on what it does best.
19:25 – 19:47
(RM): It’s interesting that the range at 2500 nautical miles, it’s only 100 miles more than the C-17. The question is, does the NGAL design under this RFI drive a tanker requirement that we would like to engineer ourselves out of?
There could be an opportunity here to reduce the requirement for tankers based on the design of NGAL, but I don’t see that that’s what the RFI intends.
19:48 – 22:31
(TT): And I would submit that this is no longer unique to the Pacific, although we’ve traditionally focused on the Pacific and this is in a combat environment: it’s getting off the X. But getting off the X in the CENTCOM AOR is important right now. And getting off the X in Europe is going to be really important if we ever get down to it over there. So there’s part of it in the RFI that gets to an element of getting off the X, which is the ability to upload and download cargo and passengers without any support equipment. So that’s going to have to be a fundamental requirement. So good on the RFI for capturing that.
There’s a couple of things as I went back through it that puzzled me a little bit. The first one is there’s actually no question that asks about receiver AR capability on the NGAL. Maybe that was intentional. I’m not sure. But I would think that particularly for the Pacific, NGAL is going to need to be able to receive fuel from a tanker.
There are other mission sets, by the way, where we’ve had to move people across the world or things across the world, and there was no stop between where it started and somewhere in the United States of America. And NGAL is going to need to be able to do that. So I think receiver refueling is maybe a critical miss in the RFI.
The second one is the RFI talks about defensive systems, but that’s actually one of the most troubling things because it immediately goes to, ‘What are the things that are on the airplane that could handle some kind of engagement, whether it’s a terminal airfield or maybe something in the air?’ But the question I would submit that we need to be asking is: what is the signature management approach of the system? Of the aircraft as a platform and how it interfaces with the system as we have it?
There’s lots of ways to manage signature. We have historically struggled with focusing first on the platform and its RF signature in response to an active RF sensor that is merely just one part of it. So maybe we’ll get to that. Maybe that’ll become part of the industry discussions. But because if the opponent never finds you or struggles to find you, they’re not going to necessarily be able to target you. And if we can do that and pull it to the left, we’re going to be winning.
The last one is a little bit more mundane, and it’s not necessarily related to getting off the X, but I think it’s particularly important going back to the long term: how do you have this system in our Air Force?
And there was no question about aircrew and maintenance training systems, which will be a critical part. And the OEM has to bring that – it can be followed up and maybe provided to the services itself by somebody else. But putting thought right at the front-end to the air crew and maintenance training systems is going to be an important part of NGAL.
But going back to the Pacific, we got to get off the X, we got to get off the X everywhere in a time of conflict. And there’s a few things that are worth talking about that aren’t in there.
22:32 – 23:13
(SK): During this same period of time, the Air Force has requested and put funding toward a new research and development program, Large Aircraft Survivability Systems, which would explore defensive weapon systems for air-refuelers and airlifters.
Meanwhile, the House Armed Services Committee has also formally adopted language in the FY 2027 National Defense Authorization Act, requiring the Air Force to report on its plan to field LASS by 2031, explicitly stating Operation Midnight Hammer as proof that air-refuelers require some sort of defense mechanism.
General Moore, if you wouldn’t mind starting us off with this one, why is the Air Force taking a revitalized approach to “survivability” for these larger aircraft?
3:14 – 24:06
(RM): I think it’s particularly important as you start looking at logistics over contested supply lines, you have to make sure that your airlift fleet is survivable. As Jackie said in the first part, these are not going to be attritable aircraft. Every single one of them that’s lost, is the loss of a national treasure.
And certainly LASS is one way to think about large aircraft survivability. I would also add that one of the things that Air Mobility Command is looking really hard at is the survivability feature is connectivity. One of the things that you can do with a large aircraft is at least let them know where the threat is and what they need to do in order to avoid it and that’s kind of the first step.
LASS then comes in or large aircraft infrared countermeasures. LARICM on the fleets that we have now, those come in in the event that that doesn’t work. But I think the first step is actually connectivity, so that you don’t get yourself in a situation where you have to use LARICM or LASS.
24:07 – 25:53
(JVO): Scott, as Midnight Hammer and Epic Fury have shown that tankers and the airlift, tactical and strategic, are all vulnerable to air-to-air and air-to-ground. Obviously, we’ve seen some reports of battle damage out there, so we absolutely have to plan for, as the name Large Aircraft Survivability Systems portends, we actually need systems that are interoperable for defensive, and we need it not to be a single point system.
It’s got to be much like: this is a kill web with sensors from space and airplanes and effectors that can come from different locations. We have to have a defensive web in layers around both types of airplanes. As Rick mentioned earlier, there is some defensive capability on C-17s, but that’s not the type of weapon that is really the reigning weapon right now.
So we have to think about kinetic and non-kinetic and layered. And that’s what LASS looks at on the layered side. Ideally, you have CCAs that are out in front or drones that are out in front that are providing a layer for not just a tanker or an airlift, but for all aircraft followed by sensors on board that can see everything that to alert the crew to scram if they have to, or to maneuver to reduce the threat or reduce the signature, followed by electronic warfare capability, followed by a last chance kinetic effector.
And does that have to come from that airplane? It all depends. But it’s a layered effect to get after the web because these are not single shot issues anymore. This is a complex web multi-domain, and we have to defeat that multi-domain threat both for airlift and tankers.
25:54 – 27:13
(TT): Scott the the only thing that I would add as well and it goes back to like thinking of this as a holistic system. And Jackie just laid out a really coherent: what’s it going to take particularly oriented on the high value airborne asset? Because it’s exactly right. It’s just as important for the rivet joints and if it ends up being an E-7 or whatever it is, the various other platforms, but it’s also the rest of the assets in the joint fight.
So it really got my attention as a mobility airman, actually, when we just became public that there’s a few air-to-air weapons with a stick of 250 nautical miles plus now in our inventory. Red has to respect that. So when red is forced to respect that, just like they’re trying to push us back, that’s pushing them back as well.
That’s winning for us in large aircraft survivability. You got to have the sensing, you got to be able to close your own kill chain on the red assets. But all of that works together. There’s no sole mobility solution. There’s no sole combat Air Force solution that fits into this. It’s all of it together that counters the red threat, enhances our survivability, lets us do the mission.
And as long as there’s an Air Force and as a joint force, we’re thinking it through that way, we’ll find the right solution. So LASS is a piece of something that’s really much larger and has to be pulled together all the way through it.
27:14 – 27:32
(SK): The Air Force has requested to fund the LASS program to the tune of $508 million, and so far four different industry partners have been contracted to take part in the study.
But what is the role of industry studies like this, particularly as the Air Force looks to develop novel and innovative capabilities necessary for the future fight?
27:33 – 28:16
(RM): So we saw with Collaborative Combat Aircraft that the Air Force took a different approach than we’ve taken before. Rather than define a requirement and pass it to industry and ask them to build to the requirement. We asked industry what would be possible if we gave them the opportunity to build CCAs and let them come back with what their thoughts were.
These industry studies are part of the way we’re letting that happen right now, rather than developing a requirement, which, by the way, invariably leads to technology that’s been available for quite some time. I suppose that’s not always the case, but that tends to be what happens. If we ask industry a question and give them a chance to do some studies and come back with an answer that wasn’t already predefined, the chances that we get something truly innovative are actually pretty high.
28:17 – 29:27
(JVO): Yeah, I would say that how we used to treat studies and now how we treat studies are really different? A decade and a half ago, we were looking at kinetic effects for defense on large aircraft. But study after study that we didn’t get very far. We didn’t drop a requirement down. We didn’t fund it.
There was some thought on test for a small weapon, but we never got there. And now, clearly the operations are showing that we have to have it and we need it soon. So when Congress said, ‘Hey, show me a plan, they must have been thinking, ‘You know, I haven’t seen a plan.’
Or maybe the briefs that they got that were unsatisfying. And that’s going to add a little pressure to ‘What’s the plan?’ But we have to have resources for the plan. And the amount of resources does not seem like it’s going to be enough for the fleet. And that’s just, I mean, LASS starts with tankers, but it is like you mentioned, this is about all heavy airplanes we need that effect for C-17 as part of the bridge strategy to 2075. You know, in 2040, the multi-domain threat, the kill webs that are out there are very complex and we have got to have a capability by then that addresses the complexity of that web.
29:28 – 30:16
(TT): Yeah. Scott on that my comment would be 500 million is a drop in the bucket. If you’re talking about fielding some type of endgame effector on the mobility platform, if that’s the number that you end up with, I’d much rather see industry be asked for options to. Rick touched on it and they’re moving out on it with [sic]. But increased connectivity to the platform, increase the situational awareness of the crew as well as the C2 system that’s supporting it, and then manage the signature in ways which are mostly passive.
You can do that less expensive than hanging things on the airplane that have to go out and go boom. If we approach it maybe in that order, which is increase situational awareness, understanding connectivity and then reduce signatures through passive means, we can make a lot of progress within a smaller budget.
30:17 – 30:32
(SK): And to continue on the thread of budget constraints – what opportunities exist for the Air Force and its industry partners to incorporate or leverage private capital to either facilitate additional funding or offset some of these costs in order to deliver these capabilities into our Airmen’s hands?
30:33 – 31:38
(RM): I think probably the most powerful way that that’s happening right now at large scale is the Office of Strategic Capital. And they have the authority to put out something like $250 billion of guaranteed loans. That is, in my opinion, the most profound impact on the requirement for research and development to be funded by the government.
It still takes time. You can’t rush the engineering and you can’t necessarily buy your way out of it. But what you’re seeing is the current administration. They understand private capital. They understand how to leverage it. It’s important to them. The Dep SecWar has said he would like to see something between one third and two thirds of the development costs of new things that are coming to the department funded by industry.
When you get into some niche capabilities that aren’t used universally and there’s no commercial application for them, like LASS, you have a little bit more difficulty. But if you’re looking at something like simply airlift capacity, then you can see that there’s applicability outside the DOW you have dual-use capability. And then I think that’s a place where the Office of Strategic Capital can come in and make a really big difference.
31:39 – 32:57
(JVO): Absolutely. What Rick was saying that the dual use potential for components for airlift and tankers that we can use for efficiency and effectiveness. And for C2, as airlines, they see to their forces. Well, they see in transit visibility of the stuff that’s moving around that they’re moving around. And they’ve been very effective with that.
And frankly, all the way out to doing autonomous operations and dropping packages, we could learn and use a lot of that to leverage as much of that as possible into the system and leave as minimal as possible for the military requirement. But there’s no doubt the military requirement is not an easy one to address.
Although when you think about what is different between a C-17 and an F-35 on some of the systems that it uses to understand itself, to sense and whatnot. So there are some components there that we could use from across, not just us, by the way, but our allies and partners who are willing to go there. And then on the allies and partners side, obviously, if we have capability that we need to be interoperable with them.
And that’s just not the airplanes themselves in the C2 piece, but the offload and unload, the minimum MHE or minimum handling equipment, minimum people doing servicing on the ground, but also flat out selling those and being able to scale that way and reduce the unit cost for the aircraft that we’re going to be buying.
32:58 – 33:37
(TT): Two words that I think is what attracts private capital. Intellectual property rights. Okay. So if you’re going to make an investment you’ve got to own the rights. The government may have its own unlimited rights, but you’ve got to have the rights to be able to use it as you see fit. And it’s an assumption like Rick made on his first comment that there’s a market out there for you to use that intellectual property, right?
And then the other one is run rate. Okay. So what’s the demand? So out there is a government man that’s going to manifest as a commercial demand that’s going to manifest? But if you’re going to bring capital to bear, you’ve got to know that there is good confidence, not 100%, that you’re going to get a return and a decent return. And if you don’t see it, you’re not going to bring it. Those two.
33:38 – 34:59
(RM): We mentioned continuing resolution before, but we didn’t spend too much time on it. But continuing resolution is probably the biggest threat to defense modernization that’s out there. On average, we spend four months out of every year in continuing resolution. Essentially, we’re giving the Chinese four months of head start every single year because we’re waiting for an appropriation to come to the Department of War. It’s truly challenging.
First of all, in a time when defense budgets are going up, typically continuing resolution is based on last year’s budget, and usually it’s something like 80% of last year’s budget. But if the budget was accelerating, then you don’t feel any of that acceleration until the continuing resolution is replaced by an appropriation. And continuing resolutions almost always include a provision that there can be no new starts. That means you can’t start a new program, and it also means you can’t transition from research and development into procurement for most programs that are out there, which means you just have to wait until it’s over.
And this is why I say we’re giving away four months of modernization space every single year. Continuing resolutions also include multiple provisions for things that would be automatic in a normal appropriation cycle that have to be individually approved under the continuing resolution. And it’s just become completely commonplace. But it is a dramatic damper on the ability to move quickly with respect to defense modernization.
35:00 – 35:10
(SK): And what are some of the challenges that industry leaders might be facing that the U.S. government might not be aware of? And in what ways should the government be engaging those industry partners to get in front of those seen or unseen hurdles?
35:11 – 36:03
(RM): I think with NGAL, a particular hurdle for industry is going to be the timeline that we think this is going to happen on. I think having a first flight by 2038, the RFI is on the street in FY26, but there’s not even money for analysis of alternatives in 26. There is $8.9 million in 27 if it makes it through the appropriations process. After a continuing resolution, because it’s new money.
But I mean, just if you look at what it takes to actually get things like this moving, I don’t see that there’s going to be a first flight by 2038. I don’t see that industry can cross that rubicon. If we were doing a commercial derivative, that would still be challenging to meet. I don’t see with a fresh design, a clean sheet design that there’s any way that’s going to happen.
With LASS, it’s great that the House asked for a plan to put this in place by 2031. I just don’t see that. I don’t see that being feasible. I don’t see that it can happen that quickly. I don’t think industry can get over that hurdle.
36:03 – 37:33
(TT): There’s either some assumption on the part of the writers of the RFI and the recapitalization memo that we don’t know, or there’s a little pixie dust laid in there, and it’s probably the latter. What I would add on this one is particular to NGAL.
If you go on the website the Sam.gov and there’s industry questions and one of the industry questions was about airworthiness and certification and what I would offer to industry and to the Air Force as well is that: unless you must, like there’s no alternative unless to get civil certification. Don’t. Don’t attempt it. The reason why is not because anybody on either side is necessarily so much better than one or the other. The incentives are different.
So for the FAA, for our civil regulatory authority, their incentives are for safety. So is ours on the military. But on the military, there are also other incentives, other mission imperatives that that airworthiness authority has to take into account. And so what you end up getting is it just is simply a different approach.
Neither one is right nor wrong. But if you are building a machine to go to the places and do the things that we’ve talked about in this call – that calls for military airworthiness. Unless you’re starting with a civil already type certified design. And I can just tell you a little bit about this, because right now I’m in a world where we’re flying a military designed aircraft with no type certification and attempting to have a civil airworthiness certificate.
This is not easy, so I would suggest not attempting to do it from the very beginning unless you have to.
37:34 – 38:51
(JVO): Well taken, right? I’ve been in that world as well, that if you do propose something that for the military and you can get data off of that for future FAA certification for civilian cargo or passenger movement or using the airplanes for something else, then there may be a lot of data, but that has to be mapped out early.
And so I’m hoping that digital twinning will show the difference against the FAA certification requirements versus what we’re trying to do in the mil-standard to support safe military operations.
I’d also add that requirements change. I have yet to see a large airplane that didn’t have some requirements change. Even in the B-21. There may be some requirements changes there. And it’s been very successful, don’t get me wrong, but we don’t yet have an updated what the joint force needs given the environment, how we’re going to fight, which is really radically different than what we did even 15 years ago.
So I would look to see and partner with TRANSCOM on the MCRS and the services to try to get a better understanding of how we’re doing it. We’ve published things on distributed operations, but what’s the final thing that we’re trying to do? And work with us on that and focus those industry studies on the areas that are the deltas that they’re out there.
38:52 – 39:04
(SK): Now, we’ve discussed two separate, but tangential efforts today in NGAL and LASS, both of which have pretty ambitious timelines set against them.
What do you see as the common thread that ties these two efforts together?
39:05 – 40:11
(JVO): So let me just start at the strategic level. These are not platform programs per se. I talked about the enterprise. They are real statement and an urgency associated with this because we want to maintain the ability to deploy and sustain forces around the globe at a time and place of our choosing.
We have been doing that for 75 years and we’ve not had an issue. We now have an issue. The environment has changed. And this is not a future problem. This is a today problem. That’s why that bridge strategy is so important. Timelines are a little questionable.
And I think that we have to look at risk over time and risk to the strategies that we’re saying we’re going to use out in the Pacific and around the globe, frankly, when it deals in denied environments. So we need to have these systems, whatever it is, whether it’s an actual platform or its software that all has to be interoperable.
We have to have sensors everywhere. The information has to be integrated for the joint force so that we can see and react to how the joint force is morphing around the globe. And that includes, the use of drones, and how we’re using that data to ensure we can do the mission of deployment and sustainment.
40:12 – 40:38
(RM): So I think you have to look at two things here. I think you have to look at what the Air Force is studying and looking at, and what they’ve actually committed to do in the budget. You can see with both of these that there’s a commitment to a study and there’s a commitment to exploration, but with neither of them is there a commitment to procurement and installation.
So I think it’s obvious that we’ve acknowledged that there’s a battlefield that we’re not prepared to fight on necessarily. But I don’t see that we’ve acknowledged that we’re going to make that become true.
40:39 – 41:27
(TT): Yeah. And that presents to industry a gigantic risk, because the Air Force and Air Mobility Command, in particular, has asked repeatedly: invest your time and effort into answering these RFIs or participating in this AOA or fill in the blank, and those don’t come for free. You know, it’s not the same as a capital investment in setting up a production line and so on and so forth.
But the Air Force has to show that it is serious about this problem that Jackie identified is not optional. This is a problem that has to be solved, should have been solved in the past, needs to be solved now. But the way that you’re going to convince industry to dig in and commit more resources is to first show that the government is serious about it. And with a couple of the other things we talk about, about what incentivizes private capital, I think it could be done. But it has to start at the beginning.
41:28 – 41:44
(SK): Now, each of you represent Elara Nova in different capacities as part of its Aeronautics & Mission Systems sector. How does Elara Nova and its AMS team in particular, fit into this ecosystem at a time when the Air Force has set lofty goals, set against ambitious targets for its mobility fleet?
41:45 – 43:05
(TT): I’ll hop on that one first. I mean, in this case helping the government on the front end. Like for example, this RFI, I don’t know if they asked somebody to come help that was outside what used to be building 1600, I don’t think they moved back into it at Scott Air Force Base. If they didn’t, that was a swing and a miss.
If they did, then great. Congratulations and good job. Keep doing it. But there’s a lot of talent and industry experience that could be just brought into, ‘Hey did you consider this?’ That makes the RFI better, makes the RFP better quite frankly, and then closes the times faster on what needs to be done. But if you don’t ask the question and you don’t bring the additional team member on board, you miss the opportunity.
And the other part I would just add throughout the process. I think if I’m out there in industry, I think that the capabilities that Elara Nova brings very much helps them in the response and identifying where the opportunities are.
There’s just a deep portfolio on this call right here. And I’m not talking about myself. I’m talking about the other two – that just know how the system works, have been out there and flown the aircraft, and if you’re able to craft a better, more coherent and innovative response just because of that then I think it’s absolutely worth ringing the phone and calling us.
It’s not quite a cheat code, but it certainly can help to move in that direction.
43:06 – 43:45
(RM): So I think Elara Nova has certainly all of those traditional things to offer that Ty talked about. I think there are a couple of nontraditional things that we offer as well, which are important. The first one is we have partnerships that allow us to help companies navigate the Office of Strategic Capital. There’s a potentially strong role for OSC to play in this process.
And we also have a team that focuses on NATO and international partners, and I think that could be key here as well. If you look at just the development costs that we’ve talked about, the ability to share those across some allies and partners and to count on procurement from other than just the U.S. Air Force, that could be an important way to get the program across the line, and certainly we can help with that.
43:46 – 44:51
(JVO): And I think Rick is spot on there. Both you and Ty. I think Ty mentioned being the interpreter. Understanding the deep experience that we have. We can interpret what the signals are, what the language is. And then we have experience possibly doing that exact process, but also contacts that are doing the process right now and are trying to help and they’re trying to translate themselves.
And how do we sit at the table on both sides and help industry and help the government speak to each other in a clear language? And absolutely on the finance part, not just only the finance division, but the OSC and the opportunities that are there, and frankly, seeing the tech that’s out there, because all of us also do and work with other various companies in various sectors and trying to apply that technology and how that might work for aeronautical mission systems or anywhere else for the Department of War.
We’re all keen to it because we all want to help. We’re not wearing the blue suits anymore, but we all want to help be part of the Department of War and be the success arm and root on our Airmen out into the future. This is our way of giving back.
44:52 – 35:28
(SK): This has been an episode of The Elara Edge. Elara Nova is the trusted global security partner delivering decisive advantage.
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