Procurement: F-35 Faces The Accountants


September 22, 2018: Over the last decade the increasing costs of the new American F-35 fighter, and delays in delivering it have been scaring off foreign buyers and causing the largest customer, the U.S. Department of Defense to examine more carefully how much it really costs to operate current warplanes. Many foreign buyers developed doubts about the cost and effectiveness of the F-35 versus their current jet fighters (often F-16s). The F-35A costs more (than the F-16, per flight hour) to operate. In 2013 it was 60 percent more, now that is down to 40 percent but it is still a bad sign. For European nations, with static or shrinking defense budgets and growing demands to help with peacekeeping operations, more expensive (to buy and operate) jet fighters just don’t fit in.

Initially, the F-35 operating costs were supposed to be the same or lower than other fighters (like the F-16, F-15 or F-18). But then it was noted that F-35 operating costs were creeping upwards. In 2011, after months of contentious disagreement, the U.S. Air Force came around to agreeing with U.S. Navy claims that the F-35 will cost much more to maintain, rather than (as the F-35 promoters assert) less. In 2010 the U.S. Navy, after nervously watching the manufacturing costs of the new F-35C and F-35B (for carrier use) increase, concluded that these aircraft would also be a lot more expensive to maintain. It comes down to this. In 2013, it cost the navy, on average, $19,000 an hour to operate its AV-8 vertical takeoff or F-18C fighter aircraft. The navy calculated that it would cost 63 percent more to operate the F-35C (which will replace the F-18C) and the F-35B (which will replace the AV-8). These costs include buying the aircraft, training and maintaining the pilots, the aircraft, and purchasing expendable items (fuel, spare parts, munitions). The Navy concluded that maintenance alone would be about a third more.

The differences between Air Force and Navy cost estimates came down to different methods of doing maintenance and calculating costs. The two services have, over the decades, developed different ways to use civilian maintenance services and stockpiling spare parts. Most navy warplanes operate from carriers, which is more difficult and expensive than from a land base. In effect, the Navy was forced to become more efficient in order to afford operating expensive warplanes at all. But now the Air Force and Navy have resolved a lot of these differences and agreed that the costs of the "cheaper" F-35 are actually higher.

The U.S. Department of Defense and the U.S. Air Force have also had disputes over how much each new F-35 fighter will cost. The air force insisted that per aircraft costs would be lower than they actually turned out to be. For example, the current production order (Lot 11) shows each F-35A (the air force version) costing $89 million each. Currently, about 2,400 F-35s are expected to be sold, most of them the 1,700 F-35As for the U.S. Air Force and 500 to foreign customers. Most of the 540 vertical takeoff F-35Bs on order are for the U.S. Marine Corps and all of the 340 F-35Cs (aircraft carrier version) are for the U.S. Navy and Marine Corps. The F-35B costs about $135 million each and the F-35C about $120 million. This is more than the F-35A partly because many more F-35As are being built and the carrier versions have to be “ruggedized” to handle the harsh treatment received when it makes a carrier landing. The air force would call such an event a “hard landing” and pull the aircraft out of service for a thorough checkup for damage. The F-35C is built to regularly survive those hard landings, as well as constant exposure to corrosive salt water. The F-35B makes gentler landings and can take off like a helicopter thanks to the special engine exhaust system that puts the propulsive jet exhaust under the aircraft.

In 2001 the U.S. believed 5,100 F-35s would be sold but the rising costs and increasing delays drove that down to 3,100 by 2013 and 2,500 by 2018. Now that some F-35s are actually in service (F-35As and 35Bs) and getting good reviews from users it is hoped sales will increase. Maybe not, because there is a lot still to be discovered about how well the F-35 will do in comparison to the many F-16s, F-15s, F-18s and AV-8s it will replace. The F-35C was supposed to enter service in 2018 but now it looks like 2019 is more likely and that will not have an impact on foreign sales because few, if any, were ever expected.

Currently, the F-35 is, at $382 billion, one of the most expensive defense procurement projects ever. Total development cost is now put at $70 billion, which comes to nearly $30 million per aircraft if only 2,500 are built. Development costs for the new U.S. F-35 fighter-bomber have grown more than a third over the last few years as the aircraft finally entered service. The additional development costs were accompanied by additional delays.

The 31 ton F-35 is mainly defined by the F-35A which is armed with an internal 25mm cannon and four internal air-to-air missiles (or two missiles and two smart bombs) plus four external smart bombs and two missiles. All sensors are carried internally and max weapon load is 6.8 tons. The aircraft is very stealthy when just carrying internal weapons. The F-35B and C do not have the internal cannon and the B model has less internal space for weapons.

Like the F-22, which had production capped at less than 200 aircraft, the capabilities, as superior as they are, may not justify the much higher costs. The F-22 fighter is stealthier than the F-35, especially from the side and rear. The F-22 is more maneuverable and has two engines instead of one in the F-35. Both are stuffed with a lot of new technology. Obviously, the F-35 tech is more recent and more powerful. For example, the stealth coatings in the F-35 are far easier (and cheaper) to maintain than those in the F-22. But time will tell (and soon) just how much cheaper the F-35 is to maintain as an operational aircraft.

Initially, it was believed that most (about 60 percent) of the F-35s built would be used by foreign nations. The rising cost of the F-35 brought with it reluctance to buy as many aircraft as currently planned. The success of smart bombs in Iraq and Afghanistan has also made it clear that fewer aircraft will be needed in the future. In any event, it's likely that F-35s will end up costing more than $100 million each and many current and potential customers realized they could upgrade some of their F-16s and get along just fine until it was clear that the F-35 was effective and affordable. That means the F-35 has to prove it is affordable to maintain. For most modern fighters operations and maintenance are 65 percent of the lifetime cost of the aircraft. Currently, the F-35A is 40 percent more expensive to maintain per flight hour than the F-16s most will replace. The F-35 manufacturer says they can reduce that gap but potential buyers will want to see that in action first. Another deal breaker is the long time it takes to modify the F-35 software and certify non-U.S. weapons for use. This is proving to be another obstacle to foreign sales. So is the U.S. policy of allowing little foreign user access to the source code of the software. That’s a security measure and the only way around it (to help sales) is to make software changes requested by foreign users in a timely and affordable fashion. Same with construction costs, which are said to be falling to under $100 million per F-35A over the next few years but that goal seems out of reach and $110 million is more likely.

The F-35 was designed to have “affordable stealth” and much more effective sensors and electronics. The F-35 stealth is much less expensive than that in the F-22 and initial combat experience over Lebanon and Syria indicates that the stealth and internal electronic countermeasures are effective. The passive sensors and “sensor fusion” software of the F-35 also appear to be working as advertised. In the cockpit, the pilot has one large (20 inch diagonal) LCD showing all needed aircraft data with more showing on the pilots JHMDS helmet visor. That is all very well, but as with the very capable F-22 it wasn’t performance that limited procurement but excessive cost.




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