Onceapilot, the reason the RAF was saddled with having to use an external supplier for its core requirements was purely political. Way back when future needs were being discussed (around 1996), conventional procurement was the assumption and the only question was which airframe. I did some (unpaid, typical of RAF ways...) assessment for the relevant MoD department looking at A310MRTT, A300, B767-200ER, B767-300ER and 'FLA' (which became A400M about 20 years later). The A330 didn't even exist then, we also compared TriStar and VC10K4 / CIK. The winner was B767-200ER due to slightly lower burn than the -300ER, but with the same internal fuel.
When it came to looking at the transport capability, it soon became obvious that the narrower fuselage cross-section of the B767 would be an issue as it couldn't take a pair of LD3s side-by-side. Paradoxically, the A300/A310 would need additional centre tanks, meaning that unlike the B767 it would have to be supplied in combi format if it was to be a contestant in any final decision. So the eventual choice looked like becoming the A310MRTT, which was what BAe proposed to build at Filton, helping British industry. The figure of 24 new build A310MRTT each with 2 hoses, a probe and 72 t of fuel using 4 ACTs was the eventual prospect.
Then came the elephant in the room of PFI and the FSTA bidding competition...eventually won by AirTanker with new A330MRTTs rather than TTSC's used ex-ba B767s. Although the B767 met the user need spec., TTSC obviously didn't realise that MoD always wanted more than they'd spec'd. Initially I preferred the B767 until I looked into the runway performance at high AUW, particularly with significant ISA dev. Even our friendly Boeing chap admitted "That's where Airbus has got us beat"....
So AirTanker became the winner - at something over £1M
per day. Which is a bit like someone needing a new car, who hasn't looked into how to pay for it - so has decided to go to Hertz to rent one. Much less expensive for a while, but after a while it becomes a MUCH more expensive option. Hertz, like AirTanker, aren't philanthropists and as such obviously expect a profit.
The best description of PFI came from the delightful Aussie lady who worked for a while on FSTA - when she went back to Australia she advised her people that PFI was not the way to go! "PFI? Poms are F*****g Idiots!"
In my humble opinion, if we'd re-examined the wing hose option when ZD949 went in for 'simple' glass cockpit modification and opted for the A310MRTT, kissing off PFI, the RAF would have been better served. But you can't put the blame on AirTanker, the PFI bolleaux wasn't of their invention!
An excellent programme on German TV channel N24 shows how the Luftwaffe use their A310MRTTs:
They don't have an expensive AAR simulator either - the training system you see was evolved as the most cost-effective solution, plus it gives them the opportunity to practise AAR mission planning and management with their Mission Computer System for absolute peanuts. You'll see that the MCS has a moving map and a DDRMI for the Air Refuelling Operator, essential requirements realised at an early stage of MCS design (we did the DDRMI and RV computation page in a couple of weeks), as the consortium used AAR SMEs rather than engineers who thought that they knew better....