AVP0011

Written evidence submitted by Boeing

 

General Information

 

  1. Boeing is the world's leading aerospace company and the largest combined manufacturer of commercial airliners and military aircraft, with capabilities in rotorcraft, fixed wing, autonomous systems, electronic and defence systems, missiles, satellites, space launch vehicles and advanced information and communication systems. The company's reach extends to customers in 150 countries around the world. Boeing employs more than 140,000 people in more than 65 countries.

 

  1. Boeing has a long-standing relationship with the UK dating back over 80 years. Today, the UK remains a critically important market for the company including as a supplier base and a source for world-leading technology partners, focused on three main business areas: civil aviation, defence and services. Boeing's annual spend in the aerospace industry supports thousands of jobs around the UK, generating intellectual property and facilitating exports.

 

Boeing in the UK

 

  1. Boeing’s civil and military customers operate over 500 Boeing aircraft in the UK. Boeing has over 2,900 employees at 30 locations across the UK, the majority of whom support Ministry of Defence (MOD) programmes through Boeing Defence UK (BDUK), Boeing’s UK defence entity which has profit and loss in the UK.

 

  1. Boeing provides the UK with aircraft that have strong commonality and interoperability with international allies, yielding cost savings, faster delivery times, and reduced risk through sharing or negating of their development. Boeing conducts the sustainment of UK aircraft, as well as crew and pilot training, in the UK. This work, as seen with Chinook and C-17 especially, tends to be decades long and often executed through a close partnership with UK Armed Forces. Boeing is deepening this model with new deliveries and the development of UK-based digital solutions, and is strengthening its ability to accommodate significant future UK business growth.

 

  1. As a major systems integrator, BDUK is positioned to support through-life system-of-systems programme management of complex defence programmes. Along with engineering and integration, BDUK also delivers through-life capability and technology management, alliance development, and supply chain management.

 

  1. Boeing's extensive capabilities are demonstrated through the variety of platforms utilised by the UK's armed forces, enhancing operational effectiveness and providing battle-winning, life-saving capability. From heavy lift capabilities of the C-17 Globemaster transport aircraft the CH-47 Chinook, to the AH-64 Apache attack helicopter, and more recently the P-8A Poseidon and the E-7 Wedgetail C4ISR aircraft, Boeing platforms and services have and will continue to offer capability advantage and unrivalled success on the frontline.

 

 

Prosperity

 

  1. As its second largest market, Boeing is committed to supporting prosperity across the UK though a Prosperity Agreement with the UK Government, focused on:

 

 

  1. Since 2015, Boeing has spent more than £12bn with UK suppliers. The UK is Boeing’s largest defence supply chain outside of the US, seeing significant (continued) growth as new programmes come to fruition, including the delivery and induction of all nine P-8A Poseidon at Lossiemouth, and the UK conversion of E-7 Wedgetail with a line established in Birmingham, in partnership with STS Aviation (two aircraft currently undergoing conversion, with the third arriving in the summer).

 

  1. Since 2015, Boeing has also spent more than £300m on capital investment throughout the UK, and over £100m on research and development projects, including in partnership with UK universities. 

 

The success of P-8A Poseidon

 

  1. The P-8A is a multi-mission maritime patrol aircraft, which excels at anti-submarine warfare, anti-surface warfare, intelligence, surveillance and reconnaissance and search and rescue. It is a proven system with more than 140 aircraft in service globally, and in the UK used daily across the North Sea territory with support extended to NATO – playing a key role in our national security. P-8A was procured by the UK Government through a Government-to-Government Foreign Military Sale.

 

  1. Boeing has delivered nine P-8A Poseidon to the Royal Air Force, which are based at RAF Lossiemouth, and housed in the newly-built Atlantic Building. Boeing continues to grow a 200-strong workforce at Lossiemouth, including apprentices and graduates, focused on maintenance, training and support of the fleet.

 

  1. There are a number of benefits to the UK of this off-the-shelf platform choice, covering capability, cost and prosperity:

 

    1. The UK Poseidon fleet shares capability commonality with the US Navy and Royal Australian Air Force. A 100% shared platform enables interoperability providing increased weight to capability across Five Eyes and other international partnerships.
    2. The RAF and Royal Australian Air Force are co-operative partners contributing development funding to the US Navy, giving the RAF significant operational capability which other international customers do not benefit from.
    3. The UK has access to adopt upgrades developed and rolled-out across the US Navy’s fleet of 120 aircraft, having already saved the UK more than an estimated $10bn in development costs.
    4. The P-8 is based on the civilian Boeing 737 NG sharing many baseline aircraft components, giving significant through-life cost savings (e.g. sourcing spares) due to economies of scale.
    5. Boeing’s spend with UK suppliers producing components for the global P-8 fleet eclipses the UK Government’s spend to procure the UK aircraft in the first instance: more than a dozen UK-based suppliers make up five percent of the content on every P-8 aircraft produced (e.g. Marshall Aerospace and Defence Group has built and delivered 1,000 auxiliary fuel tanks from its production facility in Cambridge).

 

  1. The P-8A programme has also let to significant investment aligned to the UK Government’s ‘levelling up’ agenda, with the construction of a £100m P-8A Strategic Facility, the Atlantic Building, providing maintenance hangars, offices for aircraft support, training and simulation facilities, plus a tactical operation centre. The construction was led by a local firm, Robertson, based in Elgin and at its peak created and sustained around 200 jobs locally. Boeing’s contribution this construction is £50m.

 

  1. Boeing has also worked closely with the local business community, including through our partnership with the Moray Chamber of Commerce, bringing industry days to the area to highlight the opportunities for local business as a result of the project.

 

  1. Boeing views the procurement of the P-8A as a significant success, with the ninth P-8A arriving in Lossiemouth in January 2022. It serves as an exemplar of a true capability approach addressing all Defence Lines of Development, and is often cited by the MOD as a gold standard case study due to the ease of delivering this much needed capability to the UK. The P-8A procurement has demonstrated the success of the FMS process, the benefits of joint investment and strong public-private partnership, utilising and growing local expertise and skills, and strengthening the relationship between the UK and US Governments in this capability area.

 

E-7 Wedgetail in the UK

 

  1. The E-7 Wedgetail procurement process began in 2019, via a single source contract with Boeing Defence UK Ltd. The original contract was to deliver five E-7 Wedgetail to replace the E-3 Sentry, which has since retired, as an updated Airborne Early Warning & Control Aircraft (AEW&C). The E-7 was identified as the best solution for the UK’s AEW&C capability. The E-7 is based on a civil Boeing 737 NG airframe (common with P-8) which is modified to carry a Northrop Grumman MESA radar and a sophisticated mission computer system.

 

  1. This E-7 is also operated by the Royal Australian Air Force, the South Korean Air Force, and the Turkish Air Force. Most recently, the US Air Force has announced E-7 is “the only platform capable of meeting the requirements for the Defense Department’s tactical battle management, command and control and moving target indication capabilities within the timeframe needed to replace the aging E-3”, with a contract award “planned in fiscal year 2023”.
  2. As an output from the 2021 Integrated Review, the MOD decided to reduce the planned E-7 fleet size from five to three aircraft. During this process, Boeing and the UK Government worked closely to find innovative ways that offered the UK the best balance between savings and capability.

 

  1. As part of the procurement of the E-7, Boeing supported the UK Government’s focus on ensuring there was a significant prosperity benefit across the UK:

 

    1. Boeing has partnered with STS Aviation in Birmingham to create an E-7 conversion line within the UK, creating around 100 UK jobs.
    2. The programme will see hundreds more highly skilled jobs created and sustained directly and indirectly across the UK, with Leonardo, Thales UK and Hamble Aerostructures also under contract and working on the programme at locations throughout the UK.
    3. A further £70m investment will be made at RAF Lossiemouth for the infrastructure required to support and sustain the three aircraft, which will provide a further 180 jobs.

 

  1. With the Poseidon and Wedgetail both being military derivatives of Boeing’s Next-Generation 737, the MOD has decided to co-locate the aircraft at RAF Lossiemouth. Operating both fleets from the same location will further harness RAF Lossiemouth’s strategic location and support hundreds of jobs, providing a further boost to the local economy and supply chain.

 

Fleet mobility and strategic airlift operations in the UK

 

  1. The years 2020 and 2021 mark, respectively, 40 years of Chinook operations in the UK and 20 years of service from the C-17. Recently renewed long-term sustainment agreements for both platforms mean Boeing will continue supporting these iconic aircraft for decades to come. The Chinook relationship is set to deepen further still as the UK procures 14 CH-47ER extended range Chinooks. These Chinooks are built on an existing foundation of advanced capability and life cycle affordability. The UK will be the first non-US operator of this Block II Chinook, with deliveries scheduled to start in 2026.

 

  1. The C-17 fleet of 8 aircraft provides essential strategic lift capability to the UK Armed Forces with the potential to undertake tactical actions to supplement other airlift platforms. The C-17’s unique benefit came to the fore most recently during Operation PITTING (the Kabul airlift) when C-17 provided the bulk of the RAF airlift capacity; and during the Russia-Ukraine conflict, where C-17 has been utilised to ferry deliveries of UK weaponry.

 

Apache in the UK

 

  1. Alongside the Chinook, the UK also operates the Apache AH-64D. BDUK supports over 50% of the Army’s UK battlefield helicopter fleet. Like the other capabilities within the UK’s Boeing fleet, this aligns to the US and other key allies, as well as providing the UK with key battle winning capability.

 

  1. UK Government recently procured 50 new Apache AH-64E via Government-to-Government FMS, which like other FMS contracts sees the UK becoming part of a very large global fleet. At the end of last year, Boeing Defence UK was contracted to deliver Long-Term Training and Support Services (LTTSS) for the E model Apache in the UK. As a 20-year agreement, this will see Boeing working ever closer with the British Army to provide all maintenance and engineering support, supply chain and logistics management as well as delivering all aircrew and maintainer training.

 

  1. LTTSS will create more than 200 jobs in the UK during the initial four-year pricing period, including more than 165 jobs at Middle Wallop and 45 jobs at Wattisham, plus dozens more with suppliers across the UK (e.g. Yeovil-based Kuehne + Nagel will provide a Warehouse Management service at Wattisham with a dispersed store at Middle Wallop, creating 45 new jobs; H&S Aviation will carry out the repair and overhaul of engines in Portsmouth, under subcontract to GE Aviation).

 

  1. The training that will take place via this contract will also support UK allies, who will benefit from utilising the training devices to support their own E model fleets.

 

Conclusion

 

Boeing’s case studies on FMS and Single Source procurements demonstrate that the benefit of buying off-the-shelf common platforms go well beyond provision of world-leading, battle-winning, life-saving capability.

 

Beyond the importance of having commonality of interoperable platforms with allies; these procurements deliver proven platforms into service quicker than alternative routes and significantly faster than delivering new build and bespoke platforms. Direct, off-the-shelf, procurement provides significant cost and schedule savings to the UK Government, including from the sharing of development costs with wider international fleet users.

 

With a clear and present threat in Europe and the North Atlantic, an FMS contract delivered nine P-8A Poseidon maritime patrol aircraft quickly; and will deliver the E-7 Wedgetail AEW&C capability in a proven, battle-ready form, all the work converting the aircraft from a civil airliner to a military capability taking place on British soil in the West Midlands, with UK suppliers.

 

These programmes still yield significant amounts of Prosperity benefit across the whole of the UK, as demonstrated by Boeing’s investments in Birmingham and Scotland in particular, and significant benefits to the UK companies, including SMEs, that are part of truly global programmes.

 

 

10th May 2022

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