Friday, January 24, 2014

Opinion: Do the Pundits Actually Understand the Production Costs of the F-35?

Over the last several years, the tri-service F-35 fighter program has gradually retired risks and reduced costs, in the process acquiring broader political support. More than 50% of the program’s flight-testing schedule has been completed, and no major problems have been identified. The fighter’s F135 engine has seen similar progress. With 11 allies committed to buying the airplane, the program looks unstoppable.

Although the Pentagon has been deliberately vague about how the stealth, sensor fusion and other features of the F-35 make its performance far superior to that of last-generation fighters, it is rapidly emerging as the gold standard of tactical aviation in global markets. But what will matter in the political debate at home is the airplane’s price tag, because that is the one feature of F-35 that politicians and pundits think they understand. Chances are, though, they do not.

The apparent cost of a military aircraft varies wildly depending on where it is in its production run, what items are included and whether inflation is discounted. If you want to estimate costs, heroic assumptions (also known as guesses) are required to establish values for production rates, learning curves and other parameters essential in calculating cost.

For instance, prime contractor Lockheed Martin estimates that if the program of record for the Air Force variant of F-35 is executed as planned, an airplane ordered in 2018 and delivered in 2020 will cost $85 million in “then-year” dollars ($78 million in today’s dollars). That is in the same ballpark as the latest F-16—the legacy fighter that F-35 will replace in Air Force combat units. But you have to make a lot of assumptions to get to that number.


Sweetman retorts.

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