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The U.S. Air Force's KC-10 air refueling fleet has been in service for 25 years without a major avionics upgrade. Without modernization, the KC-10 will not be in compliance with upcoming air traffic mandates regulating the minimum communication, navigation, and surveillance capabilities of aircraft flying in certain regions and altitudes. The first mandates will take effect in 2015, with additional mandates scheduled for 2018 and 2025. A loss of access to optimal airspace and routings would increase costs and degrade the KC-10's wartime effectiveness by precluding the aircraft from flying the most fuel-efficient altitudes and routings in civil air traffic systems and causing delays on the ground and in the air. A detailed analysis of the cost-effectiveness of KC-10 modernization showed that, overall, the upgrades would result in net cost avoidance. The assessment took into account varying fuel costs and cost growth for nonfuel items, as well as the costs of noncompliance, such as avoiding restricted regions and altitudes. The findings show that even under a worst-case cost scenario, the savings resulting from KC-10 fleet modernization would exceed the cost of the upgrade long before the fleet is retired in 2045.

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