WASHINGTON - The U.S. Air Force's FY17 budget request totals $166.9 billion, up from $163.1 billion enacted in FY16. The FY17 figure comprises $154.6 billion in base spending and $12.3 billion for Overseas Contingency Operations. The request contains $120.4 billion in what the Air Force calls its base Blue Budget, up from $119.1 billion enacted in FY16. The Blue Budget is the portion of funding that is under direct control of the Air Force. There is also $34.2 billion in the "Non-Blue" category, up from $33.9 billion in FY16. The Non-Blue portion of the budget comprises mostly classified money that is actually controlled by agencies outside the Air Force.

The Air Force wants $38.5 billion in base procurement, plus $5.4 billion in the OCO account, for a total of $43.9 billion. The total reflects a nearly 4 percent decline from the $45.7 billion enacted by Congress for FY16. The base procurement request is also $3.4 billion less than what the Air Force was originally projecting for FY17 under the previous year's spending plan. The $28.1 billion requested for research, development, test, and evaluation (RDT&E) in FY17 represents an 11.5 percent increase over the FY16 enacted level of $25.2 billion. The Air Force had projected an FY17 research budget of $28.5 billion, so the actual request is about 1 percent less than expected.

The request includes a total of $14.8 billion for aircraft, the result of $13.9 billion in base spending and $859.4 million in OCO funding. The base aircraft procurement budget is $2.5 billion less than planned under the previous year's budget outlook. The Air Force's projected aircraft budgets total $15.9 billion in FY18, $15.5 billion in FY19, $16.7 billion in FY20, and $18.4 billion in FY21. The final year of the Future Years Defense Program is when F-35A procurement is slated to increase from 48 aircraft to 60, and when Combat Rescue Helicopter funding ramps up, accounting for most of the funding increase between FY20 and FY21.

The service wants $4.4 billion for 43 F-35As in FY17, which is five less than planned. Those five aircraft have been deferred to future years, but they were also included on the Air Force's unfunded priorities list. The request includes $1.4 billion for development of the B-21 bomber, and a total of $12.1 billion over the next five years. The service originally planned to spend $2.2 billion on the bomber in FY17, but near-term funding was scaled back due to program delays. The Government Accountability Office (GAO) denied a protest from the Boeing/Lockheed Martin team in February, allowing Northrop Grumman to continue work on the program.

Development of the KC-46A tanker is winding down as the program nears full-rate production. The service wants $261.7 million for development in FY17, with development funding ending in FY19. The request includes $2.9 billion for procurement of 15 tankers, which is the planned annual procurement rate through the FYDP. Meanwhile, development of an Air Force One replacement and the Combat Rescue Helicopter is ramping up. The Air Force wants $351.2 million for the Presidential Aircraft Replacement program in FY17, $625.6 million in FY18, and a total of $2.8 billion through FY21. The CRH receives $319.3 million for development in FY17, with $1.4 billion programmed through the FYDP. Advance procurement of the CRH program will begin in FY19, with the Air Force planning to request $623 million for the first year of procurement in FY20. The Air Force wants $128 million for the Joint Surveillance Target Attack Radar System (JSTARS) recapitalization program in FY17, down from the planned $298.5 million. Development funding rises to $414 million in FY18, with the Air Force planning to spend $2.2 billion through FY21.

The request includes $145.7 million for two C-130Js, $317.6 million for three HC-130Js, $548.4 million for six MC-130Js, and $453 million in OCO funding for 24 MQ-9 Reapers. A line was added to the FY17 request for the UH-1N replacement program, which receives $18.3 billion in initial funding. The first four helicopters will be bought in FY18, with a total of 26 aircraft planned through FY21. The total procurement objective is 72 helicopters. The Air Force was originally planning to replace its aging Huey fleet with refurbished Black Hawks, but the service now wants to procure brand-new aircraft.

The Air Force has set aside $2.8 billion for aircraft modifications in FY17, including $272.1 million for various bomber upgrades; $105.7 million for F-15s; $97.6 million for F-16s, including 24 active electronically scanned array (AESA) radars; $175.8 million for the F-35; $78.4 million for the F-22 Increment 3.2B upgrade; $211.4 million for the KC-135; $254 million for the MQ-9; and $89.4 million for E-3 AWACS upgrades, including new mission systems and digital cockpit and navigation systems. (This list is not all-inclusive.) The latest budget plan increases funding for the EC-130H Compass Call, just a year after Congress blocked the Air Force's attempt to retire half the fleet. The service wants $130.3 million for EC-130H upgrades in FY17 and a total of $353 million through the FYDP. The FY16 plan had called for just $35.3 million in FY17, and a total of $214.5 million over five years. The Air Force will maintain all 14 aircraft in the fleet through FY18, but then plans to phase out six aircraft in FY19. The service is also planning to retire 28 C-130H Hercules aircraft between FY17 and FY19.

Retirement of the A-10 has been pushed to the right, but the venerable platform is still on track to be gradually removed from service by 2022 under the current plan. The Air Force wants to retire two A-10 squadrons (48 aircraft) in FY18, followed by 49 aircraft in FY19, 64 in FY20, and 96 in FY21. Service officials say this trajectory is purely budget driven, and is necessary to free up resources for the F-35. The A-10 could be kept in service longer if additional funding is made available. Comparative tests scheduled for 2018 will take a more focused look at the F-35's close air support capabilities, and lawmakers may try to stave off A-10 retirements until those tests are complete.

The Air Force is seeking $431.6 million for 360 extended-range Joint Air-to-Surface Standoff Missiles (JASSM-ERs), $350.1 million for 256 AIM-120D Advanced Medium-Range Air-to-Air Missiles (AMRAAMs), $260.2 million for 4,507 Small Diameter Bombs, $127.4 million for 287 AIM-9X Sidewinder missiles, $179.1 million for 1,536 HELLFIRE missiles, and $59.5 million for procurement of the first 20 Long-Range Anti-Ship Missiles (LRASMs). The service plans to procure 106 LRASMs through FY21.

The Space Procurement budget totals $3.1 billion in FY17. The account was expanded to include a number of smaller space-related programs previously funded under the Air Force's Other Procurement account. The Space Procurement account itself was only created in FY16 to pay for satellite and launch vehicle programs previously funded under the Missile Procurement account. The FY17 request includes $645.6 million for Advanced EHF, $737.9 million for five Evolved Expendable Launch Vehicles (EELVs), and $362.5 million for the Space-Based Infrared System (SBIRS) satellite program. The budget continues to support a fixed-price block buy of AEHF satellites five and six and SBIRS geosynchronous Earth orbit (GEO) satellites five and six, while pushing a GPS III satellite from FY17 to FY18.

Source: Forecast International - International Military Markets
Associated URL: http://www.forecastinternational.com
Author: S. McDougall, Defense Analyst