Procurement: Why The F-35 Is A Hard Sell


August 17, 2010: Israel has agreed to buy 20 American F-35 fighters, for $137.5 million each. That includes spares, tech support, training and maintenance equipment, but not additional Israeli made gear that will be added. The first Israeli F-35 will be delivered in five years. Israel had originally wanted to buy 75 F-35s, but things changed (costs went up, way up) as the aircraft got closer to production. The Israeli F-35s are actually paid for by the United States, out of the nearly a billion dollars a year in military aid Israel receives. Israel may still buy more F-35s, after they have had some experience with them.

Two years ago, Israel was having second thoughts about buying the new American F-35 stealth fighter-bomber at all. When Israel first bought into the program back in 2002, the quoted "flyaway" costs per the aircraft alone was $47 million. When delivered, in 2014, the price was expected to rise to an inflation adjusted $80 million. It is now about $96 million. After Israeli add-ons (mostly electronics), support and training costs have all been added, the per-aircraft cost has gone past $200 million. This has caused a big case of sticker shock among senior Israeli defense and political officials. In response, the F-35's manufacturer went into full damage-control mode. The main argument being made was that the special equipment Israeli firms were designing and manufacturing would keep nearly half the aircraft work in Israel, and will create enormous potential sales of that gear to other F-35 users.

Development costs for the new U.S. F-35 fighter-bomber has grown by a third, to $60 billion, over the last few years. That means the average development cost of the estimated 5,000 F-35s to be built, will be about $12 million each. This overhead share will increase as the number of F-35s bought declines, and that is what is happening. The air force wants to buy 1,763, to mainly replace aging F-16s and F-15s. But now air force generals are talking about just buying "more than 1,500" F-35As. The total purchases may be less than 3,000 aircraft.

The additional development costs are accompanied by additional delays before the aircraft enters service. Production costs will average close to $100 million, or more. Then you have a share of development costs, meaning that $130 million per aircraft, or more (probably more) is likely.

Like the F-22 fighter, the F-35 is stealthy, and is stuffed with lots of new technology. Most (about 60 percent) of the F-35s built will be used by foreign nations. The rising cost of the F-35 brings with it reluctance to buy as many aircraft currently planned. The success of smart bombs in Iraq and Afghanistan has also made it clear that fewer aircraft will be needed in the future.

U.S. Air Force simulations and studies have shown the F-35 to be four times as effective against any current fighter (the best of them known as "fourth generation" aircraft.) The major advantages of the F-35 are engine power (its one engine generates more power than the two engines used in the Eurofighter or F-18), stealth and the fact that it can fight "clean" (without any pods or missiles hung from its wings, and interfering with maximum maneuverability).

The 27 ton F-35 is armed with an internal 25mm cannon and four internal air-to-air missiles (or two missiles and two smart bombs). Plus four external smart bombs and two missiles. All sensors are carried internally, and max weapon load is 6.8 tons. The aircraft is very stealthy when just carrying internal weapons. The first F-35s will enter service in four years.



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