The limitations of the AC-47 as a gunship became apparent soon after the type’s introduction to combat.  However, the gunship concept was so promising that work on a successor system started and a number of types were considered.  Eventually the C-130 Hercules was selected for a variety of reasons including its better performance, longer endurance, ability to carry more and heavier weapons and better avionics.  Known as the Gunship II programme, the first AC-130A test aircraft arrived at Nha Trang on 21 September 1967 for a 10-week operational trial over Laos and South Vietnam.  The aircraft returned to Nha Trang in February 1968 after a brief refurbishment in the USA and continued operational trials until December.  A host of technical and supply problems constantly delayed the delivery of further AC-130s but eventually enough aircraft arrived in Southeast Asia to form a squadron.  The 16th SOS was activated at Ubon under the 8th TFW on 30 October 1968 using the original test crews and aircraft as a nucleus.  The AC-130A programme was code-named Pave Pronto but the aircraft was more commonly known as Spectre after the Squadron’s radio call sign.  Four more AC-130s had arrived at Ubon by the end of 1968 allowing the prototype, 54-1626, to return to the USA for refurbishment.

From December 1968 many Spectre missions were flown with F-4 escorts provided by the Night Owls of the 497th TFS.  Each gunship sortie would be accompanied by up to three F-4s, which cycled to and from tankers to provide a continuous presence to increase the firepower available and to help protect the AC-130 from ground attack.  Late in 1969 modified AC-130s under the code name Surprise Package began to arrive at Ubon.  These aircraft had improved armament including 20mm Gatling guns and 40mm Bofors cannon and a Paveway I laser designator.