U.S. Air Force officials have decided not to renew a contract with Alenia North America to support and induct the small, Italian-made C-27A transport aircraft into the Afghan Air Force.

The decision, provided by the Air Force via letter Dec. 18, is the latest in a string of disappointments for Italian Aerospace conglomerate Finmeccanica as it has sought to boost its U.S. business.

Last February, the Air Force abruptly halted purchases of Alenia’s C-27J Spartan for use by U.S. forces, In addition, Finmeccanica’s AgustaWestland rotorcraft in 2009 lost the joint program with Lockheed Martin to build the next-generation Marine One presidential helicopter.

The Afghan transport decision leaves Alenia little stateside work beyond March.

The moves come after what Air Force officials called “failed attempts” by Alenia to “generate a sufficient number of fully mission-capable aircraft for effective [Afghan Air Force] airlift capability.” According to Ed Gulick, a service spokesman, “Though the Air Force assisted Alenia throughout the program in an effort to help the program succeed, Alenia struggled to consistently achieve key contractual requirements.”

An industry official says Alenia is exploring whether it has any recourse to the decision. As the decision is not a contract termination, there is little opportunity for significant termination liability costs to be reimbursed. And without a major U.S. prime contractor involved, the company does not have significant weight in Congress to seek political help outside the Pentagon.

In 2008, the U.S. paid $314 million for the purchase of 20 former Italian Air Force G.222s — designated the C-27A by the Air Force — to give to the fledging Afghan National Army Air Corps, later the Afghan Air Force, an independent tactical transport capability to replace Soviet-era Antonov An-32s.

However, their introduction to service has been far from smooth. Only 16 of the aircraft have been delivered to Afghanistan, with four remaining in Italy. Despite a deployed team of contractors, the aircraft struggled with serviceability issues and have been grounded twice — once in December 2011 on airworthiness grounds, and again in March 2012 because of safety issues that delayed the training of Afghan personnel. That forced the use of smaller Cessna 208 Caravans and Mi-17 helicopters for transport operations.

Company response

While acknowledging problems with the aircraft’s introduction, a company official says the C-27A fleet is now exceeding the requirements laid down by the U.S. Air Force. The industry official says the company was sent notices warning it of contract deficiencies, but never received Air Force feedback from its responses. Furthermore, Alenia says the contract signed in March was undefinitized.

“Conservatively, we spent around $20 million of our own money sourcing new parts for these aircraft, that was spent in good faith to retain the contract,” the industry official said. The company sourced parts from G.222s stored in Argentina to keep the Afghan fleet going and brought in new contractors, including Dyncorp International for engineering and training and General Dynamics for translation services. Engineers were limited by hangar slots as they worked on the aircraft.

The company official says there are now between 10-12 aircraft available for missions, significantly more than the six required by the U.S. Air Force.

Around $600 million has now been spent on the program, and the industry official believes that spending another $60 million would ensure the type’s continued operation. This would cost less than introducing a new type such as the C-130, according to the industry official, who says such a move would require the retraining of personnel on a more complex system.

In a statement, an Alenia spokesman said the company was committed to the success of the G.222 program and the U.S. Air Force as it stands up a trained and capable Afghan Air Force. “Our team works tirelessly to support the program, meet our commitments and swiftly address any concern, big or small, even those connected to other parties,” the company said.

“We stand behind the G.222 airplane, arguably one of the safest, most durable cargo aircraft in history – well suited for the mission,” the company added. “The company is weighing its options and plans to meet with stakeholders to discuss the status of the program, as well as the investment and progress made to date.”

Suspending flights

The NATO Training Mission and the Air Force will suspend C-27A flight operations in Afghanistan in the coming weeks, but no decision has been made on the final disposition of the aircraft and the associated support equipment and spare parts.

Gulick says, “U.S. Air Force leadership continues to recognize and support Afghanistan’s need for a sustained medium airlift capability to meet current and future Afghan national security requirements. U.S. and Afghan Air Force leadership are engaged in talks with Department of Defense officials on the next steps.”