The Joint Strike Fighter program from an Australian perspective (1)

One of the past week’s most significant defence-related occurrences would have to be Canada’s cancellation of its order of 65 F-35 Lightning II Joint Strike Fighters (JSFs), with which it intended to replace its current fleet of CF-18 Hornets. According to the report contained in the Ottawa Citizen, the decision was made in light of an auditor-general’s report that placed the whole-life cost of the JSF order at more than C$30bn. Such a move has put Canada’s plans to modernise and replace its main combat aircraft right back to square one, and with the CF-18 not expected to remain in service much after 2020 there is a certain degree of efficiency and re-evaluation required in the acquisition process.

Australia faces a similar set of circumstances, with the F/A-18A/B fleet due to be replaced around the end of this decade, yet their planned replacement – also the F-35 – is looking increasingly distant and it is doubtful whether or not there will be a credible capability in place come 2020 to take the place of the Hornets which will, by then, have seen 35 years service with the RAAF. In light of the Canadian decision and the delays to the JSF, I thought it useful to consider the situation faced by Australia in a little more detail. Initially the issues over project cost, then technical and capability shortcomings, as well as a consideration of the actual strategic and tactical requirements that have shaped the JSF decision and a look at which aircraft have been proposed as potential ‘legacy’ Hornet replacements should the F-35 purchase be cancelled.

Firstly, to follow on from the recent Canadian experience, the cost issues involved in the program. The Citizen report indicates a series of inconsistent and contrasting financial estimates from different branches of the Canadian government and public service – the estimate used by the Conservative government in their election campaign of 2011 placed costs at $15bn for cumulative purchase and whole of life costs for the F-35s, whereas the Defence Department provided internal costings of $25bn. These estimates were based off an assumed 20 year life-cycle, but Pentagon figures assume a 36 year life-cycle. The Canadian Parliamentary Budget Officer then predicted a 30 year estimate of at least $30bn – something likely to be confirmed by an upcoming KPMG audit.

Comparing the costs faced by the Australian government, in 2007 the Howard Government announced that the F-35 purchase would cost Australia $12bn. The next year the Rudd Government increased this sum to $16bn. At present, the cost to purchase the first tranche of 14 Australian F-35s comes to AU$3.2bn by itself, and around $6.4bn for the second tranche of 58 aircraft. The final tranche of 28 would come at a cost of around $3.1bn (based of DoD figures of $130mil for the first 14 and $110mil for every aircraft thereafter). An Australian Parliamentary publication on the F-35 predicts in-life costs of $20bn to operate the entire fleet of 100 aircraft over a 30 year life-cycle. All together this comes out at approximately $33bn including the initial purchasing plus in-life costs.

Since 2001 the average single unit cost has risen from US$69mil up to an estimated maximum of US$137mil per aircraft. When a government is faced with program costs that are now twice their initial estimates, it is easy to see why they might baulk at the subsequent decision. This much is especially true of countries whose military requirements and expectations are not quite as pronounced as those of the United States. For some, the sort of expense required is one that is difficult to justify in the face of no credible threat or significant combat function.