On March 4, a brazen attack by Al Qaeda insurgents on an army base in the south of Yemen caught government soldiers by surprise. Some reports placed the death toll at nearly 200, with eyewitnesses describing a nightmarish scene of mutilation and beheadings.

Yet, as the Al Qaeda insurgency boils over in southern Yemen, the majority of the country's air force is not currently involved in counterterrorism operations or even flying regular air patrols. Rather, many top air force officers and pilots are sitting in makeshift tents in the capital, Sanaa, demanding the removal of the air force commander, who they say has systematically destroyed the service.

The strike by air force rank and file started in January and comes at the end of Yemen's Arab Spring, a popular and at times bloody revolution that eventually led to a negotiated transfer of power from Yemen's president of 33 years, Ali Abdullah Saleh, to Abdu Rabu Mansur Hadi, previously the vice president. But an entrenched network of Saleh's family members remains in control of many Yemeni civil and military institutions, including the air force, which is run by the former president's half brother, Mohammed Saleh.

“We are here to end the corruption and get rid of the family leader,” says Staff Lt. Col. Abdullah Al Yemeni, a flight engineer on strike who received U.S. training at Maxwell AFB, Ala. “He has made the Yemeni air force into something like a farm or a company.”

With thousands of other officers striking alongside Al Yemeni, the protest has brought the air force to a near standstill at a time when Yemen is a central theater of operations in the ongoing U.S. war against Al Qaeda and its affiliates. The result, despite several hundreds of millions of dollars in security assistance from the U.S. to Yemen over the past four years, is that a key tool in the global war against Islamic terrorists is essentially grounded.

Indeed, the strike comes at a critical time: unrest in the Yemen's south, home to Al Qaeda in the Arab Peninsula (AQAP) continues to grow, as evidenced by the attack this month. Nor is this just an internal problem for Yemen, according to senior U.S. officials.

“We judge [that] AQAP remains the node most likely to attempt transnational attacks,” Director of National Intelligence James Clapper told Congress in January.

But Al Yemeni and other striking pilots, mechanics and senior officers interviewed by Aviation Week paint a bleak portrait of the air force after two decades under Muhammad Saleh. They describe grounded aircraft, an autocratic commander who siphoned off U.S. money; and a former president who used Al Qaeda as a fund-raising banner.

Yemen operates a haphazard mix of Russian- and U.S.-provided equipment, a reflection of the country's role as a political pendulum between East and West since the Cold War. Today, the air force operates U.S.-built Bell Helicopter Hueys and Northrop F-5s, as well as Soviet-built aircraft such as Mil Mi-17 helos and Sukhoi Su-22 fighters.

For security reasons, Yemeni officers decline to state the exact number of aircraft in their inventory. But according to local reports, the air force has perhaps several hundred aircraft, many in no condition to fly. The air force's one squadron of F-5s is in particularly bad shape, according to pilots and engineers. “Most of the aircraft are grounded,” says Capt. Asem Al Hasani, an F-5 pilot.

To keep even a handful of F-5s in the air, for example, mechanics have had to cannibalize engine parts, leaving several F-5s sitting on the ground without engines. But even the F-5s that are flying are in questionable condition. “[Muhammad] Saleh said, 'fly until you destroy all parts of the aircraft,'” says Al Hasani.

A particular complaint of F-5 pilots is that the cartridges that power their ejection seats are expired. Al Hasani recalls a colleague who died in an F-5 crash 13 years ago; the aircraft suffered mechanical problems, and when the pilot attempted to eject, nothing happened. “It's the last chance for your life,” stresses Al Hasani. “You have to be able to exit.”

Air force Col. Muhammad Muhammad Awad says Saleh ordered service life extensions 29 times for the F-5 seats, despite the expired cartridges.

Both pilots and mechanics allege that the air force commander has repeatedly overruled mechanics and engineers who refuse to sign off on maintenance reports, instead ordering pilots to fly aircraft deemed to be unsafe. “He destroyed all of the technical achievements of the Yemeni air force,” says Gen. Abdul Aziz Al Muhaya, deputy commander of Dulaimi Air Base near Sanaa.

Yemen's two Lockheed C-130Hs also illustrate the perilous state of the air force. Al Hasani recounts a recent case when a squadron commander issued a report advising that one C-130 be grounded due to a maintenance issue. “We gave [Mohammed Saleh] a maintenance report that said the aircraft was due for inspection,” he says. “But he gave an order to the maintenance commander to fly.”

Making problems worse, air force officials say the maintenance facility to which the aircraft were sent for repairs was not qualified to do the work, resulting in even more damage. “We asked for assistance from the U.S.,” says Al Yemeni. “Experts came in to study the aircraft and the cost to rebuild it. They gave us a report that it's about $70 million to get them back in service.” Both C-130s remain grounded and there is no timeline for getting them in the air again.

Counterfeit parts have also made their way into the supply chain because, pilots and mechanics allege, the air force commander uses family-owned companies to buy parts off the black market at cut-rate prices. U.S. assistance—which has provided spare parts for a number of its aircraft like the F-5s, the Bell 407s, and the Hueys—has only partially alleviated this problem, and a number of senior officers also allege massive corruption involving U.S. funds meant for the air force.

Indeed, the state of the Yemeni air force is at odds with the amount of assistance provided by Washington in the past few years, including foreign military financing funds for the two C-130Hs, delivery of four Bell UH-1Hs in January 2011, and support and spare parts for the Mi-17s and F-5s. Another $82.8 million was designated for the air force to support its helicopters in counterterrorism operations, according to the Pentagon.

But much of that assistance has not been used for counterterrorism, say air force officers. For example, Gen. Ali Abdullah Saleh Al Haymi alleges that $40 million meant for operations against Al Qaeda were never directed to that effort, and even weapons provided to the military were used to prop up the regime rather than fight terrorism. “U.S. assistance was used to kill Yemeni people, not to kill Al Qaeda,” asserts Al Haymi.

Mohammed Albasha, a spokesman for the Yemeni embassy in Washington, insists that no U.S. security assistance funds have been embezzled and that President Hadi is working with a new committee that will address the concerns of the armed forces, including the air force. “The military has initiated the daunting task of restructuring and modernizing the armed forces,” he says.

The U.S. Defense Department does not provide cash assistance to the Yemeni air force, making any claims of direct embezzlement impossible, according to U.S. Marine Corps Maj. Chris Perrine, a Pentagon spokesman. “We provide equipment, which we procure, as well as training,” he says. “We also conduct extensive end-use monitoring to ensure the equipment we provide is used for the intended purpose.” The Pentagon has not seen any evidence that U.S.-provided training or equipment was used against peaceful protesters, he adds.

The Pentagon is clearly aware of problems with security assistance, however. Plans to deliver an Airbus Military CN235 aircraft and related equipment are on hold, as is support for the Huey II helicopters. Although U.S. military assistance has been on hold since last year, “given the election of a new president and Yemen's critical security needs, we are currently considering resumption of our suspended military assistance to help Yemen confront the common threat of Al Qaeda,” says U.S. Army Lt. Col. James Gregory, a Pentagon spokesman.

With continued U.S. assistance still in question, and the Yemeni government facing mounting turmoil, the air force's immediate prospects are poor. The airmen on strike say they will not return to work until Mohammed Saleh steps down, and the situation could quickly grow worse. Al Yemeni points out that although 30% of the air force is still on the job, the vast majority of those working support the strike. “They are waiting for the order to strike if our demands are not met,” says Al Yemeni. “It will escalate.”

In the meantime, the air force standoff is part of a growing power vacuum that is allowing the conflict with Al Qaeda to spread in Yemen. On March 5, one day after the Al Qaeda attack in the south, a bomb went off inside one of the air force's Antonov aircraft parked at an airbase near Sanaa International Airport. Al Qaeda claimed responsibility for the bombing, which did not result in any casualties.

U.S. assistance also remains in limbo amid the deteriorating political situation. “[Defense Department] officials said that a decision has not yet been reached about whether funds will be allotted to Yemen, but they are developing contingency plans for that possibility,” says a March report from the U.S. Government Accountability Office.

A key facet of the fragile power-sharing deal that led to Saleh's ouster was to rebuild the nation's security forces. Al Haymi says that under new leadership, Yemen and its air force would become a far better ally to the U.S. He claims that the deposed president merely used Al Qaeda to scare up funds from the U.S., while cutting back-room deals on both sides of Yemen's conflict.

But as much as Al Haymi and other officers would like to see the air force modernized, he also cautions that the answer to Al Qaeda may not be new aircraft or better weapons. “To fight Al Qaeda is to demonstrate to people that you can run an effective government,” he says. “It's not technology.”