Plans to convert old commercial aircraft into military transporters are being considered by the Ministry of Defence as it grapples with a severe lack of air transport capability.

The MoD is understood to be considering a number of options to fill a gap that has been created by the near four-year delay to the Airbus A400M, which will perform the bulk of the Royal Air Force’s transport missions when it is eventually introduced.

One option under review is to convert old BAe146 aircraft into military transporters. They can be bought or leased for as little as $2 million (£1.2 million) each, which is an attractive proposition for defence chiefs facing future possible budget cuts.

The four-engined 146 is unusual among commercial aircraft because it is capable of steep ascent and descent, which is necessary for military missions. It is used at airports such as London City, which requires a steep descent, as well as countries including India where regional airports often have runways that are too short for larger commercial jets.

The 146, also called the Avro RJ in some variations, was developed by British Aerospace in the late 1970s. It came into service in 1983 and 387 of them were sold, making it the most successful British commercial aircraft. However, production was stopped in 2002 because BAE Systems was losing money on the project.

Several hundred aircraft are still in service, many owned by BAE’s Asset Management division, which leases them to customers such as Lufthansa and Swiss International.

The older aircraft are being retired from commercial service and turned into freighters. BAE has identified the RAF as a potential new customer and the 146 has been offered to the MoD as an option to increase the RAF’s airlift capacity until the A400M enters service. The MoD is also considering buying or leasing C130Js built by Lockheed Martin and Boeing’s C17.

The MoD is understood to favour a combination of these purpose-built military aircraft but they are both expensive options. The C130J costs between $60 million and $90 million and the C17 Globemaster III costs up to $250 million.

These aircraft can carry considerably more cargo than the 146, which has a payload of about 12.5 tonnes. The C130 can carry nearly 20 tonnes and the C17 up to 77 tonnes.

BAE believes that cost could be the decisive factor for the MoD. A company spokesman said: “We believe that the 146 will offer cost-effective additional airlift capabilities for an interim or long-term requirement, particularly at a time when defence budgets are under strain.”

The RAF’s existing fleet of C130K Hercules transport aircraft was introduced in 1966 and the planes are being retired having reached the end of their working lives.

The RAF has ordered 25 A400Ms for about £2.6 billion to replace the Hercules and had expected to receive the first aircraft next year.

Technical difficulties have meant that Airbus still has not flown the aircraft and deliveries have been pushed back until 2012 or 2013.

Airbus has written off €2.4 billion on the A400M project and is losing money at a rate of about €1 billion a year on it. Despite the delays, the launch customers, including Britain, have agreed to continue with the project and a new contract will be signed later this year.

The MoD said it was considering all options to fill the capability shortfall created by the A400M delay, but declined to comment on specific aircraft.

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