Fighter Procurement News- India, Netherlands

India’s much-heralded purchase of the Dassault Rafale fighter, critical for closing a yawning gap in India’s force structure left by the retirement of MiG-21s and other older aircraft, is moving forward at a snail’s pace, as India contemplates an expensive integration of Russian missiles for the platform. Never mind that India has a large enough air force to comfortably use two sets of ordinance (as they already do with their Mirage fleet), or that having two ordinance sets provides a nice insurance against flaws in any one system, integration of new weapons and the consequent delay in procuring the fighters could well cost more than maintaining two sets of ordinance.

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The Dutch government, in a stroke of illogic that beggars belief, has decided to purchase only 37 F-35A Joint Strike Fighters over the next five years, while selling their new naval support ships. The expensive F-35 was always going to cripple Dutch force structure and defence procurement, but it seems the government is trying to mitigate the damage by purchasing a force so small as to be useless for anything beyond domestic air defence, a role for which the F-35 is hardly the optimal aircraft. There is a word that a government wanting to preserve capabilities while cutting costs should be strongly urged to consider: Gripen.

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Speaking of which, an interesting piece on the possibilities of the Gripen for Canada can be found here, and a more formal one from the Ottawa Citizen here. The Gripen in its new NG version is a real balm to the ills of modern fighters. It is not only reasonably priced, but has a low cost of ownership, a complete array of integrated weapons (a big problem with other platforms including Eurofighter and F-35), high speed (unlike the Super Hornet and the F-35), great manoeuvrability (the F-35’s dogfighting ability has frequently been questioned), up-to-date electronics… It is neither a demigod of aerial combat like the Eurofighter nor a full stealth aircraft like the F-35, but neither is it far behind in those areas, and if the RCAF can buy two Gripens to an F-35 with a guarantee that maintenance costs won’t leach money from other important capital programs (of which the RCAF has several), it would be more than worth it.

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In other news, the crisis in Syria has seen a prolonged congregation of Russian, American and NATO ships in the Eastern end of the Mediterranean. A map of the ships from earlier this month.

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F-35 vs. Typhoon: Which Costs More?

When the Aeronautica Militare placed its initial order for three F-35As, it was able to approach the Italian Parliament with a surprisingly low unit cost: 80 million dollars. This is significantly lower than what European countries are paying for their Eurofighters. But what exactly is unit cost? How is it determined? Is it the cost of manufacturing the airframe? The cost of airframe plus engines? Airframe plus engines plus flight avionics? What about weapons systems integration? What about development costs? Up-front investment? Cost of ownership? What about differences caused by different service requirements? What gets averaged into the unit price can mean a difference of hundreds of millions of dollars. One thing is certain: whether or not it’s included in the sticker price, it will be in a contract somewhere, and will get paid somehow.

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Eurofighter (Centre) with Su-30MKI and Tornado

Eurofighter (Centre) with Su-30MKI and Tornado

With so many possibilities for juggling the figures, it is no surprise that fighter manufacturers have become expert in doing so, and incidentally created a confusopoly (to borrow a word from Scott Adams) by filling the market with incomparable prices. Defense Aerospace.com’s 2006 paper Sticker Shock: Estimating the Real Cost of Modern Fighter Aircraft is one of the braver attempts to create comparable baselines for the major contenders in the Western fighter market. Some of its findings are unsurprising- the Swedish JAS-39 Gripen is both the cheapest to buy and the cheapest to own, with the French Rafale a close second. The Super Hornet is not nearly as cheap as advertised. But most shockingly, the F-35 is at least several million dollars less expensive per unit than the Typhoon.

That the Typhoon is expensive is something everyone has been painfully aware of. Its tortuous pan-European procurement model and the vascillation and wrangling over different national requirements have contrived to make it one of the great cautionary tales in procurement lore. But that the F-35 is cheaper- well, we’ll see about that.

It should be noted that Defense Aerospace’s estimate of F-35 unit price, $115 million, is significantly higher than the price quoted by the Italian Air Force- and this was in 2006, before the full cost footprint of the F-35 was understood. Winslow Wheeler, the Director of the Straus Military Reform Project at the U.S. Center for Defense Information, estimates the unit cost at $155 million. As far as a country like Canada is concerned, that could go up as far as $167 million. But that is nothing compared with Canada’s share in the total program cost, now estimated to be in the neighbourhood of $46 billion over 42 years- an eye-bugging $707.7 million per plane.

So, are we just comparing apples and oranges? Should we concede that the whole mess is beyond our meagre imaginations and give up trying to make sense of it? No. Because in the end, whatever the sticker price, a certain amount of money has been directed in total to procuring a certain number of new airframes. That global number may be difficult to dig out, but the taxpayer deserves to know how much public money is being spent per aircraft. More than that, it is part of due diligence for a government to properly study all the ways in which these programs might bleed money in order to improve the cost-effectiveness of their purchase. Unfortunately, if they believe a program is in their interest for other reasons, they may deliberately turn a blind eye.

It also matters who’s buying. If you’re paying for the development of an aircraft and the initial orders, your costs will be higher than those of a foreign buyer five years later. If you consider the Rafale’s total program cost of around 39.6 billion euros, then the 115 aircraft built for France thus far average to 344 million euros, which will decrease to around 152 million euros if all planned aircraft are delivered. The flyaway cost for a new customer, however, may actually be in the neighbourhood of the avertised $62.1 million, which of course does not include cost of ownership and may not include certain systems.

In short, it is usually better to buy someone else’s aircraft with a limited defence budget, and, for Canada at least, even a $114-118 million Typhoon (assuming that unit prices have not been reduced) would still be far better than a $167 million F-35. But it is not the sticker price, but rather the total program cost, from the beginning of the program through systems integration through cost of maintenance and upgrades that needs to be considered- and laid out for public scrutiny. If they are not, then no unit cost quoted in any competition can be trusted to reflect the true cost of the program.

About time, and may the most cost-effective and air-to-air capable platform (the Canadian Government still maintains the pretence that airspace protection is the primary mission, rather than bombing small countries) win. That isn’t the F-35, but it is hard to choose among the others. The Gripen is an economical platform in every respect, designed for cold weather and very capable. The Typhoon is probably the best air-to-air platform in the West short of the F-22, and investment by Canada could bring a lot of long-planned upgrades, including AESA radar, for which Europe would thank us. Rafale is a good all-round platform but problematic in terms of weapons compatibility. The Super Hornet is an aerodynamically dated airframe but with excellent electronics and support, is relatively cheap and reliable, and offers the possibility of conversion to the electronic warfare “Growler” version, a very enticing capability as Australia has discovered. If the contract is fought with an eye toward industrial offsets, France and Sweden have both proven willing to go that route, and it will unfortunately be likely to rule out the Eurofighter, whose procurement process is already ridiculously complex.