As I have pointed out on this blog before, getting a firm price on a fighter jet is an epic task. Currency fluctuations, fees, economic offsets, bribes... There is a very good reason KPMG was paid quite handsomely for its now infamous F-35 cost audit.
The best thing about the KPMG audit is that it is quite well itemized. Costs are broken down in nice, neat categories. This gives the reader a better ability to compare "apples to apples" when placed along other fighter jet deals.
|A tale of 2 fighters. (the left one is the X-35, but hey...)|
With some trepidation, I will place the KPMG audit, details of which can be found here, alongside the recent (and still controversial) Swiss Gripen E purchase, details of which can be found here. The Swiss Gripen purchase has not been as smooth as Saab would have liked, with the Dassault Rafale being declared the winner on performance. The Gripen E was declared the overall winner based on value. However, a recent Swiss government vote has approved purchase of the Gripen E, but without the necessary amounts to actual approve funding. It must be noted that Switzerland has a large political movement that is opposed to the purchase of ANY jet fighter, and similar issues occurred during the procurement of Switzerland's current F-18 fleet.
The Swiss Gripen deal is to include 22 Gripen JAS-39Es, along with mission planning systems, initial spares and support, training, and certification. This works out to $149 million per Gripen aircraft. This deal also includes the lease of 11 older Gripen C and D models to ease transition and maintain capability. It must be added that this deal is all but finalized and the $3.27 billion dollar cost is a "firm fixed price".
Sound expensive? Hold on...
The KPMG audit shows a "Acquisition Total" of $8.99 billion for 65 F-35As. This does include spares, training, and certification, but not initial support. That cost is detailed below under (what I assume) is itemized as "contractor support". This "contractor support" is listed as costing an additional $1.98 million. Added together and divided amongst the 65 aircraft, that comes out to $169 million per F-35. If we add the $565 million already invested in the JSF program as a "Tier 3 partner", that total now rises to $177.5 million per F-35. Unfortunately, the F-35's cost is still in flux. Its actual unit cost will depend greatly on how many F-35s are made in total, and how early delivery is to be made.
Perhaps the F-35 is worth an additional $28 million per plane? The real price difference is in the operating costs.
|Lt. Gen. Bogdan: Don't like my F-35 cost estimates? Take it up with this guy...|
Jane's has recently estimated that the F-35As operating cost would come out to roughly $21,000 per flight hour. Some have had issues with Jane's methodology and estimates, so I will instead refer to no less than USAF Lt. Gen. Christopher Bogdan, the executive officer currently in charge of the F-35 program. In a recent statement to the Dutch, Bogdan stated that the flying cost for the F-35 would be $24,000 per flight hour. This, despite the F-35's original goal to reduce flying costs compared to legacy aircraft.
So, what about the Gripen? Well, the Jane's study clearly states that the Gripen is the cheapest modern fighter to operate. Mind you, this is the C/D version. A more modern and complex E/F version, with AESA radar, IRST and the like would likely cost slightly more... But it would unlikely jack up the operating cost an additional $20,000 per flight hour on top of the C/D model's $4,700.
According to Canada's National Fighter Procurement Secretariat's "Draft Industry Engagement Request", Canada's new fighter will be expected to be flown "15 hours per aircraft, per month". Using Lt. Gen. Bogdan's $24,000/hour flight cost, this works out to $4.32 million per F-35, per year. That's about $281 million per year for the whole fleet.
The Gripen? If selected that would work out to $846,000 per jet, per year; based on the low end of the scale of $4,700 per flying hour. This gives a fleet-wide cost of $55 million. Even if we double the operating cost, to $1.6 million per year, per jet, that is still only $110 million per year for the entire fleet, that's still less than half of the F-35's operating cost. Over a 30-40 year period, the cost saving are hugely obvious.
What about the Typhoon, Rafale, and Super Hornet? They will all likely fall somewhere in the middle, with the Gripen likely still being the far most affordable.
[NOTE: This article is for comparison purposes only, and I cannot 100% verify all the totals and figures. If you disagree with some of the cost estimates, click the corresponding links and take it up with those guys. I just merely worked the math using their figures. Your mileage may vary... Etc... Etc...]