According to Boeing News dated September 13, 2005: The Boeing's the industry Global Tanker Team currently working on aerial refueling tankers for Italy and Japan has agreed to partner should the U.S. Department of Defense and the U.S. Air Force determine a new aircraft is the best solution for replacing the KC-135.

The Global Tanker Team convened recently in St. Louis, committing to deliver the most advanced aerial refueling capability for its global customers. Muellner had remark that "This is a skilled team with more than 75 years of experience in aerial-refueling technology, integrated systems, and aircraft manufacturing and modification," "The Boeing 767 advanced aerial refueling tanker, which was selected by two of our allies - Italy and Japan - is in production and flight-test today. In addition, Boeing has a complete family of aircraft to ensure requirements as defined by the U.S. Air Force can be met. (1)

Boeing KC 767 Widebody Tanker & Transport The KC-767 will be the world's newest and most advanced tanker

	Models: KC 767 –200C/F, 300C/F and –400C/F models
	Costs for used 767-300ER aircraft vary between $51M and $88M In terms of speed its Mach 0.8 performance compares to the Mach 0.85 or better performance of the KC-135 aircraft.
	Aerial refueling and airlift , Global within flight refueling capability. Offload 20 percent more gas than the KC-135E and unlike the E-model, can itself be refueled in flight.
	Have the capability to refuel Air Force, Navy, Marine and allied aircraft on every mission. At maximum takeoff weight, the KC-767A requires 4,000 feet less runway than the KC-135E.
	Besides its role as a tanker, the KC-767A will be configured as a convertible freighter and can carry 200 passengers or 19 pallets of cargo.
	Equipped with both the proven Boeing-developed boom-and-receptacle and the hose-and-drogue aerial refueling systems, the 767 Tanker/Transport offers maximum operational flexibility along with full European Union and NATO interoperability.
	The aircraft's uninterrupted cabin floor can be configured for: Passenger; Freighter; Convertible (passenger or freighter); and Combi (passenger and freighter).
	The 767 Tanker/Transport is a low-risk solution that brings to bear the unique capabilities of the world leaders in tanker design and integration: The Boeing Company and Alenia Aerospazio/Aeronavali, which together have almost 2,000 new-production tankers and tanker modifications to their credit and it is fully integrated tanker system.
	Modern flight control systems with enhanced feel characteristics. All primary control surfaces are triple hydraulically-powered with emergency backups. .
	Autopilot flight director functions in all phases of flight (takeoff, climb, cruise, descent, and landing). Autothrottle capability through full flight regime. The flight control augmentation system includes yaw damper and stabilizer trim functions. The yaw damper includes turn coordination. The stabilizer trim system provides advanced speed & trim control throughout the flight envelope.
	2 pilot seats, 2 observer seats (Boom operator seats at remote refueling operator station) .

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On 23 May 2003 Under Secretary of Defense for Acquisition, Technology and Logistics Edward C. "Pete" Aldridge announced the approval of the Air Force KC-767 tanker lease initiative. In the next step, the Secretary of the Air Force will now forward a report to Congressional oversight committees detailing the terms and conditions for review and approval. The agreement provides for leasing 100 KC-767 aircraft from the Boeing Co. for six years starting in 2006, at a cost of $131 million lease price plus an additional $7 million in lease-unique costs per aircraft.

The total cost will be less than $16 billion. The initiative also includes a provision to purchase the aircraft for about $4 billion at the end of the lease 2017. The strategy allows the Air Force to begin replacing the KC-135E tanker fleet three years earlier than planned. With an average age of over 43 years, the KC-135E fleet is the oldest combat weapon system in the Air Force inventory. (7)

Boeing proposed that the Air Force lease these aircraft based on the 767 in a commercial type arrangement. The proposal would allow the Air Force to lease 100 tankers, to replace 136 aging Boeing KC-135E aircraft. The E-model economic service life is markedly different from that of other KC-135s because of the difference in age and technology of some of its major components, most notably the engines. The 767 lease initiative would cost of $20 million per plane per year under a 10-year lease arrangement. An unmodified 767 costs between $100 million and $112 million. The cost of a 767 tanker is somewhere between $150 million and $225 million, depending on the number ordered and the nature of the modifications.

Boeing proposed that the Air Force lease these aircraft based on the 767 in a commercial type arrangement. The proposal would allow the Air Force to lease 100 tankers, to replace 136 aging Boeing KC-135E aircraft. The E-model economic service life is markedly different from that of other KC-135s because of the difference in age and technology of some of its major components, most notably the engines. The 767 lease initiative would cost of $20 million per plane per year under a 10-year lease arrangement. An unmodified 767 costs between $100 million and $112 million. The cost of a 767 tanker is somewhere between $150 million and $225 million, depending on the number ordered and the nature of the modifications.

This leasing program also will require between $600 million and $1.2 billion in military construction funding to build new hangars, since existing hangars are too small for the new 767 aircraft. The government would also pay another $30 million to $60 million per aircraft on the front end to convert these aircraft from commercial configurations to military; and at the end of the lease, the government will to pay for $30 million more, to convert the aircraft back. All these costs raise the total cost of the Boeing deal to $30 billion over the ten-year lease.

If Boeing does not get the tanker deal with the Air Force, it will be hard pressed to win commercial sales to keep the 767 production line open. Development of the 787 will become even more important for Boeing to retain market share for 250-seat airplanes. The 767 probably will be superceded by the the 787 if the tanker deal does not materialize. (7)

May 25, 2004, Secretary of Defense has deferred a decision on the tanker recapitalization program until additional studies now underway can be completed later this year (2004). The decision was based in part on recommendations made by the Defense Science Board’s Aerial Refueling Task Force. (11)

The KC-767 will be the world's newest and most advanced tanker. It can offload 20 percent more gas than the KC-135E and unlike the E-model, can itself be refueled in flight. It will also have the capability to refuel Air Force, Navy, Marine and allied aircraft on every mission. At maximum takeoff weight, the KC-767A requires 4,000 feet less runway than the KC-135E. Besides its role as a tanker, the KC-767A will be configured as a convertible freighter and can carry 200 passengers or 19 pallets of cargo. (7)

"Boeing 's Global Tanker Team takes advantage of 75 years of tanker platform experience to reduce the developmental risk for all our customers," Muellner emphasized that "This includes proven expertise in network centric operations and integrated avionics solutions, lean manufacturing concepts, and advanced aerial refueling systems. With this experience and our new tanker aircraft flying right now, Boeing can deliver a proven aerial refueling aircraft years before the competition. Operations analysis of publicly available information shows the state-of-the-art KC-767 outperforms the competition in operating costs, fuel burn, ramp-capacity optimization, and runway-length optimization. These advantages add up to more refueling aircraft based in-theater and greater flexibility for the warfighter and planner alike." (1)