First RAAF Joint Strike Fighters to Cost $130m Each, New Estimates Reveal

30 Maret 2012

F-35 Joint Strike Fighter (photo : Lockheed Martin)

AUSTRALIA can expect to pay about $130 million each for its first two Joint Strike Fighter (JSF) aircraft and an average of about $85 million if it opts to buy 100.

These increased cost figures come in the US Defence Department's selected acquisition report for 2011 (SAR11) presented to Congress overnight.

The report is an update on major US defence programs including the Lockheed Martin F-35 JSF.
Despite the apparent price hikes, the Australian Defence Force is confident final prices will be lower because the most recent fixed-price incentive contract was significantly below the SAR10 cost estimate.

Australia's first two aircraft will be produced in a later contract lot.

SAR11 shows an increase in costs owing to a number of factors, although it is not the substantial blowout tipped by some commentators.

One change relates to accounting practice, with JSF costs now based on 2012 dollars rather than the 2002 dollars used over the past decade. Taking into account inflation, that indicates an apparent cost increase of some 25 per cent.

Real cost increases apparently stem from decisions by the US and other nations to defer purchase of 242 aircraft until later in the program. That has the effect of delaying the move to high-rate production when greater efficiencies drive costs down.

As well, Lockheed Martin faces unspecified additional costs to rework existing aircraft to overcome faults discovered during the test program, an issue referred to as concurrency.

Australia is considering acquiring up to 100 JSF aircraft but has so far contracted to buy just 14. A decision on the next tranche of 58 will come next year.

JSF has faced steady criticism that it will be late, expensive and won't deliver the promised level of capability.

For Australia, SAR11 indicates Australia's first two aircraft, scheduled for delivery in the US from 2014, will cost about A$130 million, based on 2012 prices and a US1.03 exchange rate.

Each of the first 14 aircraft will average about A$110 million, in line with previous defence estimates.

Across the entire program of 100 aircraft, Australia can expect to pay an average of $85 million each, compared with a $75 million figure cited in 2008 and based on the less favourable US$0.92 exchange rate.

Because JSF development will continue for at least the next four years and the start of full rate production has been pushed out to 2019, definitive JSF costs remain elusive.

In Canberra last week, JSF program head Tom Burbage said Australia could still expect to pay an average $US70 million ($A67 million) with early production aircraft costing more and later aircraft less.

(The Australian)