Procurement: The F-16 Marketplace

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June 6, 2009: Four years ago, Chile bought ten new F-16s (Block 50 models) from the U.S., for $50 million each. Chile also bought 18 used F-16s (Block 20 models) from the Netherlands for $10 million each. Noting that the well maintained used aircraft performed as well as the new built ones, Chile is shopping around for more used F-16s, to replace 16 elderly F-5s that are about to retire, and 24 Mirages 50s that were recently retired. There are a lot of used F-16s for sale, so buyers have a lot of good opportunities to explore. Chile is looking for another 18 F-16s, and the Netherlands is seen as the most likely supplier.

Chile isn't the only nation taking advantage of the used fighter market. Last year, Romania bought 48 U.S. F-16 fighters for $4.5 billion. Half were be the latest model, the F-16C Block 50. The others will be used, and reconditioned to F-16C Block 25 standards. Romania could have waited a few years and bought the new F-35 instead, but that would have cost them more money (nearly $6 billion for just 24). Romania did the math and realized that 48 F-16s would be more than adequate to handle any neighborhood spats. And if Russia became a problem, Romania is now a member of NATO, and capable of calling on some very big allies. Chile also considered the air power capabilities of its neighbors, and concluded that a mix of new and used F-16s would be more than adequate.

While the U.S. still has about 1,300 F-16s in service (about half with reserve units), over 4,200 were produced, and America has hundreds in storage. The end of the Cold War in 1991 led to a sharp cut in U.S. Air Force fighter squadrons. Moreover, the new F-35 will be replacing all U.S. F-16s in the next decade. So the U.S. has plenty of little-used F-16s sitting around, and an ally that it would like to beef up militarily.

 F-16s are still produced for export, and these cost as much as $70 million each (the F-16I for Israel). Some nations, like South Korea, build the F-16 under license. A used F-16C, built in the 1990s, would go for about $10 million on the open market. 

 The 16 ton F-16 has an admirable combat record, and is very popular with pilots. It has been successful at ground support as well. When equipped with 4-6 smart bombs, it is a very effective bomber.

 

 

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