Jets dearer than admitted
Richard Baker
July 9, 2007
The F-35 Joint Strike Fighter.
Photo: Lockheed Martin Corp
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THE true cost of each new fighter jet Australia buys from the troubled Joint Strike Fighter program is far higher than the Federal Government and Royal Australian Air Force have made public.
A recent assessment by senior RAAF and Defence Department officials has concluded that Australia will pay at least $131 million before each F-35 Joint Strike Fighter will meet the minimum requirements to enter active service.
To date, and in an attempt to make the cost of the F-35 appear lower, the Government and the RAAF have preferred to tell the public each aircraft will cost between $67 million and $80 million. But this cost — referred to in the jargon as the "recurring fly away cost", neglects to include costs needed to make the plane operational.
The figure used by the Government will only get the F-35 out of the factory door, not into the air. To make an aircraft useful and operational, the so-called "average procurement unit cost" needs to be taken into account.
This cost includes the documentation, training, support systems and initial spares that are the minimum requirements for an aircraft to enter service.
The Age believes the most up-to-date Defence Department assessment of what it will cost to get an F-35 in service is $131 million a plane.
The program director of the Australian Strategic Policy Institute, Andrew Davies, said the cost methodology favoured by the Government and the RAAF when it came to the F-35 was not technically wrong, but did not take into account many of the costs required to enter a plane into service.
"The lowest figure is the recurring fly away cost, which is the cost incurred every time a new airframe is rolled out the hangar door," Mr Davies said.
The Age asked Defence a series of questions about the procurement cost of the F-35. But a Defence spokesman declined to address procurement costs due to the "different non-procurement profiles between the US and Australia".
Australia has allocated up to $16 billion to buy between 70 and 100 F-35s to replace its fleet of F-111 and F/A-18 Hornets. The first of the F-35s, made by Lockheed Martin, is due in 2013.
The Government's plans suffered a big setback earlier this year when the US Air Force revealed it would cut its purchase of the F-35 by more than half, pushing up the cost of production. Though led by the US, eight other nations are contributing towards the Joint Strike Fighter program. For those countries expecting to buy from the first production run of F-35s, such as Australia and Britain, the costs of each plane are expected to be greatest.
In March, a US Government Accountability Office report revealed a 12 per cent rise in F-35 costs and forecast further delays in its schedule.
The Labor Party, retired RAAF officers and defence analysts have recently called for the Government to review its decision to acquire the F-35. A final commitment to the program is not required until next year and the Government has been urged to conduct a cost-benefit analysis between the F-35 and the bigger, more capable but more expensive F-22 Raptor.
The Government is also under pressure to adequately explain why it made a snap decision earlier this year to buy 24 Super Hornets from the US Navy as a stopgap measure. The F-111 is being retired in 2010 and the F-35 will not be operational until 2015.
Ignoring the advice of his air force chiefs who said an interim fighter was not required, Defence Minister Brendan Nelson decided to spend $6
http://www.theage.com.au/news/national/f35-dearer-than-admitted/2007/07/08/1183833344654.html#
Richard Baker
July 9, 2007
Photo: Lockheed Martin Corp
AdvertisementAdvertisement
THE true cost of each new fighter jet Australia buys from the troubled Joint Strike Fighter program is far higher than the Federal Government and Royal Australian Air Force have made public.
A recent assessment by senior RAAF and Defence Department officials has concluded that Australia will pay at least $131 million before each F-35 Joint Strike Fighter will meet the minimum requirements to enter active service.
To date, and in an attempt to make the cost of the F-35 appear lower, the Government and the RAAF have preferred to tell the public each aircraft will cost between $67 million and $80 million. But this cost — referred to in the jargon as the "recurring fly away cost", neglects to include costs needed to make the plane operational.
The figure used by the Government will only get the F-35 out of the factory door, not into the air. To make an aircraft useful and operational, the so-called "average procurement unit cost" needs to be taken into account.
This cost includes the documentation, training, support systems and initial spares that are the minimum requirements for an aircraft to enter service.
The Age believes the most up-to-date Defence Department assessment of what it will cost to get an F-35 in service is $131 million a plane.
The program director of the Australian Strategic Policy Institute, Andrew Davies, said the cost methodology favoured by the Government and the RAAF when it came to the F-35 was not technically wrong, but did not take into account many of the costs required to enter a plane into service.
"The lowest figure is the recurring fly away cost, which is the cost incurred every time a new airframe is rolled out the hangar door," Mr Davies said.
The Age asked Defence a series of questions about the procurement cost of the F-35. But a Defence spokesman declined to address procurement costs due to the "different non-procurement profiles between the US and Australia".
Australia has allocated up to $16 billion to buy between 70 and 100 F-35s to replace its fleet of F-111 and F/A-18 Hornets. The first of the F-35s, made by Lockheed Martin, is due in 2013.
The Government's plans suffered a big setback earlier this year when the US Air Force revealed it would cut its purchase of the F-35 by more than half, pushing up the cost of production. Though led by the US, eight other nations are contributing towards the Joint Strike Fighter program. For those countries expecting to buy from the first production run of F-35s, such as Australia and Britain, the costs of each plane are expected to be greatest.
In March, a US Government Accountability Office report revealed a 12 per cent rise in F-35 costs and forecast further delays in its schedule.
The Labor Party, retired RAAF officers and defence analysts have recently called for the Government to review its decision to acquire the F-35. A final commitment to the program is not required until next year and the Government has been urged to conduct a cost-benefit analysis between the F-35 and the bigger, more capable but more expensive F-22 Raptor.
The Government is also under pressure to adequately explain why it made a snap decision earlier this year to buy 24 Super Hornets from the US Navy as a stopgap measure. The F-111 is being retired in 2010 and the F-35 will not be operational until 2015.
Ignoring the advice of his air force chiefs who said an interim fighter was not required, Defence Minister Brendan Nelson decided to spend $6
http://www.theage.com.au/news/national/f35-dearer-than-admitted/2007/07/08/1183833344654.html#