Boeing puts 737 up against small business jets for $6.9B defense contract

SEATTLE – For a vital aircraft that will fly above distant battlefields, the Air Force will choose between Goliath and two Davids.

One is a jet originally designed to carry around 135 passengers, the two others built to carry fewer than 20 people.

With a $6.9 billion deal on the line, a militarized version of Boeing’s 737 jet is going up against the Gulfstream G550 and the Bombardier Global 6000 high-end business jets for a special-mission contract to be awarded as early as this fall.

The 17 JSTARS jets at issue will be stuffed with high-tech military radar and computer-analysis equipment.

The planes are heavily used in combat zones for surveillance of ground forces and to target enemy positions. The current JSTARS fleet is now active in strikes on the Islamic State of Iraq and Syria.

Chicago-based Boeing, which has a big presence in the Seattle region, hopes a JSTARS win could incline the Air Force to choose the 737 to replace more than 100 different types of special-mission aircraft in its inventory – contracts that are lucrative far beyond the mere number of 737s involved.

But the competition from Georgia-based Gulfstream and Canada’s Bombardier is formidable.

For special missions, air forces around the world are increasingly selecting business jets that fly higher, faster and further than airliners. The Air Force initially chose the Gulfstream for a separate electronic-jamming plane code-named Compass Call, although Boeing in May formally challenged that process.

Fred Smith, director of global sales and marketing at Boeing Military Aircraft, dismisses the business jets as “a great solution for countries with smaller air forces and navies.”

As for the U.S., he said, “for a bigger mission, you need a bigger airplane.”

In a conference room inside Boeing’s former Space Center in Kent, Washington, now a hive of different defense programs, a reporter donned a virtual-reality visor to take a look at a mock-up of the jet maker’s 737 JSTARS contender.

JSTARS – Joint Surveillance Target Attack Radar System – is an Air Force-Army system revolving around a massive, long-range radar that monitors what’s happening on the ground in a battle zone.

A virtual mock-up shows the radar hidden in a canoe-shaped bump about 20 feet long under the jet’s fuselage. Operators at 10 stations toward the rear of the aircraft would monitor large computer screens, analyzing the radar data and communicating with U.S. forces.

Aft of the stations, large metal cabinets housed the computer servers and other equipment.

Forward of them was a robust printer and a “mission table,” with a tabletop computer display screen of the battle zone.

At the front of the cabin, immediately behind the flight deck, was a crew rest area for long-endurance missions and extra seats.

Then Smith showed off a Boeing marketing trick, designed to impress upon the Air Force why size matters.

With a click of a button, an arc of light sliced through the virtual cabin, superimposing upon Boeing’s mock-up another cabin wall that cut off half the computer stations.

“That’s the G550 fuselage,” Smith said.

The Gulfstream jet is proposed by a team led by defense firm Northrop Grumman and L3 Technologies, a leading integrator of military electronics.

L3 is the lead system integrator role on the Compass Call contract and is set to choose the aircraft for that program – Boeing’s protest of the contracting process centers on L3’s close collaboration with Gulfstream.

L3 integrated the intelligence, surveillance and reconnaissance mission systems on G550s sold to Australia, Israel and Singapore and for other special-mission models sold to Japan and Germany.

Northrop is the prime contractor on the current JSTARS fleet. First deployed in combat during the first Iraq war in 1991, those jets are all converted 707 airliners – now with an average age of 48 years and ripe for replacement with something more efficient.

Alan Metzger, Northrop’s vice president for surveillance and targeting systems, said in an interview that though the Air Force needed a 707-size jet to house all the equipment when the original JSTARS contract was awarded in 1985, a smaller business jet is appropriate today because the technology has all been miniaturized.

“I don’t understand why you need a 135-passenger aircraft to carry around 10 Air Force operators,” Metzger said.

Northrop bought a G550 and outfitted it with the current JSTARS mission equipment to demonstrate not only that the jet was big enough and met all requirements but that it had sufficient margin for any anticipated future growth.

The key advantage of the business-jet solution is performance, he said.

The G550 will fly hundreds of miles farther than a 737 and burn less fuel. It’s so much lighter it can take off from a shorter runway, giving it access to almost twice as many bases around the world, Metzger said.

And the G550’s standard flight ceiling is 51,000 feet, compared with 41,000 feet for the 737.

That matters when you are beaming radar down into a mountainous region such as, say, Afghanistan.

At lower altitudes, a mountain peak up ahead may be in the way. As the plane flies higher, it has a direct line of sight into more of the landscape below.

“You’ll see less if you have to look through rock, instead of over it,” Metzger said.

The third JSTARS contender, offering the Bombardier business jet as the platform, is a team led by defense giant Lockheed Martin, partnered with electronics and mission-systems integrator Raytheon.

Raytheon is separately bidding against Northrop to provide the high-tech radar equipment on the JSTARS plane and all three contenders are ready to offer whichever radar system wins.

The Bombardier Global 6000 is larger than the G550, both longer and with a wider cabin, yet still about half the weight of the smallest 737.

The U.S. Air Force uses a Global 6000 for its E-11 special-mission jet, which is an airborne node for relaying battlefield communications.

And the Bombardier jet too has won a series of foreign military orders, said Stephane Villeneuve, Bombardier’s vice president of specialized aircraft. It’s the platform for the U.K.’s Sentinel reconnaissance fleet, AWACS aircraft for the United Arab Emirates, intelligence-gathering aircraft for India and maritime-patrol aircraft for Israel.

“In the international market, people are going to a business jet for all the missions we are describing here,” Villeneuve said.

That trend threatens Boeing’s hope of extending its line of modified commercial jets for the military by replacing all the U.S. Air Force special-mission aircraft with 737-based models.

The Gulfstream and Bombardier jets each cost just over $60 million at list prices, some $20 million cheaper than the Boeing 737 model on offer. And they do burn a lot less fuel than the big jet.

Nevertheless, one of Boeing’s major arguments is that the Air Force will save money on a fleet of 737s because maintenance and operational costs are so much lower.

There are more than 9,000 of its 737s in service around the world, Boeing argues, with spare parts available anywhere in the world within 24 hours and with a tremendous reliability record that minimizes downtime.

Smith compares the Air Force’s options to someone looking to repair a Ford truck rather than a fancy sports car.

“There’s a maintenance shop on every corner,” he said. “It’s extremely cost-competitive.”

He cited U.S. Defense Department data showing that when maintenance costs are included, the total operational cost of a 737 used to ferry around top military brass is about half that of a G550-based Air Force jet used for the same purpose.

Rod Meranda, Boeing’s sales and marketing lead for the JSTARS program, contends that the Air Force also takes on less risk if it goes with Boeing. For example, he said, neither the G550 nor the Global 6000 has ever been fitted with an in-flight refueling capability – a JSTARS requirement.

“There’s a lot of risk taking a small airplane, cutting a hole in it and putting in in-flight refueling,” said Meranda. “How much will it take to test that, something that’s never been done before?”

Boeing by contrast has already installed in-flight refueling on its 737-based fleet of P-8 Poseidon anti-submarine jets.

The Air Force plans to weigh the cost, risk and performance of the three proposals on offer and choose the JSTARS replacement by year end.

If Boeing were to win, the necessary military modifications to the airframe would likely be done during final assembly on the Renton, Washington, production line – perhaps even on the same dedicated military line now churning out the P-8s.

Where Boeing would then install the mission equipment, the radar and all the computers, is unclear.

Still, for Renton, a Boeing JSTARS win would be significant and worth more than just 17 airplanes. It would indicate a high likelihood of further special-mission aircraft contracts later.

First though, Goliath has to beat the Davids.