Because the new U.S. defense budget cut purchases of 16 C-27Js for the air force, plans to convert some of those two engine transports into gunships, have been scrapped. Now the air force plans to convert some existing MC-130 transports (designed for commando missions) to gunships. The MC-130 already has an all-weather capability, and longer range (because of wing tanks and in-flight refueling), making it the easiest C-130s to convert.
Longer term, SOCOMs (Special Operations Command) two dozen gunships (the AC-130) are wearing out because of heavy use in combat. In 5-10 years, all of them will have to be retired, or heavily rebuilt. So the air force portion of SOCOM (AFSOC, Air Force Special Operations Command) has been scrambling to come up with replacement aircraft. That's how they came to consider converting new light (two engine) transports to "light gunships." It turns out that these gunships are very popular for fighting in places like Afghanistan, or any place that harbors Islamic terrorists.
SOCOM wanted to take a C-27J and mount a pair of 30mm automatic cannon on them, along with the AC-130 sensors and communications gear. AC-130s now also mount Hellfire missiles, which the C-27B could also accommodate. The one thing the "AC-XX" (as this experiment was dubbed) will probably not get is the 105mm howitzer, whose recoil was barely contained by the larger C-130. But the missiles were meant to replace the 105mm weapon anyway. Within two years, AFSOC hoped to prove the AC-XX acceptable, and then more aircraft can be ordered to replace the current AC-130 fleet. A bonus with this switch is that the AC-27B will be built so weapons and sensors will be modular, and easily installed, or removed, from any C-27B, making the C-27B fleet more flexible. Now the air force will have to stick with C-130s, and move fast to expand the AC-130 fleet, while also replacing the current ones that are wearing out. However, if they get their C-27Js back, or decide that a twin engine gunship is really important, the AX-XX may yet live.
Gunships first appeared, using World War II era C-47 transports, in the 1960s over Vietnam. The troops called the gunships, which liked to operate at night, "Spooky."