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Drivers of Aircraft Operating and Support (O&S) Cost Growth

• Case studies of the KC-135R/T and C-130H fleets identified four categories of operating and support (O&S) cost growth: Fuel costs drove 31 percent of overall O&S cost growth, unit-level personnel costs 30 percent, weapon system sustainment costs 27 percent, and modifications and other costs 12 percent.
• Many drivers of cost growth fall outside the Air Force's control.

Reducing Aircraft O&S Costs

• Various fuel-efficiency initiatives can help reduce fuel costs, as can efforts to reduce total flying hours.
• Unit personnel costs might be reduced by consolidating many maintenance activities within a global network of maintenance facilities and by increasing the size of operation squadrons.
• The root causes of weapons system sustainment costs are war-related effects and aging effects; while the former will diminish with the end of overseas contingency operations, the latter are more difficult to mitigate.
• The Air Force's Cost of Logistics and Cost Effective Readiness efforts seek to help address O&S costs through better understanding of the interactions between readiness requirements and the costs they drive.

Between fiscal years 1996 and 2011, Air Force expenditures on aircraft operating and support (O&S) costs grew at above-inflation rates, despite reductions in the overall size of the Air Force fleet. To understand why, in fiscal years (FYs) 2012 and 2013 the Air Force commissioned RAND analyses of O&S cost trends. This executive summary describes key findings from the FY 2012–2013 analyses; discusses recent Air Force efforts to mitigate, and hopefully reduce, the largest categories of O&S costs; and recommends additional actions for Air Force leadership consideration.

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