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Experts: Canada’s Potential F-35 Cut Would Hurt Mission

Dec. 15, 2012 - 09:42AM   |  
By DAVID PUGLIESE   |   Comments
An F-35A completes a check flight from the Fort Worth, Texas, F-35 factory in October.
An F-35A completes a check flight from the Fort Worth, Texas, F-35 factory in October. (Lockheed Martin)
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VICTORIA, British Columbia — Analysts are questioning whether the Canadian military will have enough fighter aircraft to perform its missions following an audit that warned the country’s Department of National Defence could order 10 fewer F-35 Joint Strike Fighters, and that the projected cost of that program had risen to more than 40 billion Canadian dollars ($40.6 billion).

Defence Minister Peter MacKay and Public Works Minister Rona Ambrose both said during a Dec. 12 news conference that Canada was “hitting the reset button” on its fighter jet procurement. Government representatives will examine other aircraft besides the F-35 as potential replacements for the Royal Canadian Air Force’s CF-18s.

But the two ministers stopped short of announcing an open competition to replace the CF-18, and without that, Canadian Forces and industry sources say the F-35 will ultimately be selected as the Air Force’s next fighter aircraft.

How many of those aircraft will be purchased, however, is now open to question, analysts said.

Also last week, Australia, another JSF customer, announced a plan to purchase more F/A-18 Super Hornets, which will almost certainly bring down that country’s planned JSF buy. Yet in the U.K., a minister said he expected that country’s purchase to exceed 100 jets at some point.

Back in Canada, a report from the KPMG auditing firm requested by the government and released Dec. 12, determined that the Department of National Defence (DND) had not built in enough of a contingency fund for its proposed purchase of 65 F-35s to deal with any cost overruns.

The government has in place a 9 billion Canadian dollar cap on the purchase of new fighter jets and associated systems, such as weapons and simulators.

But KPMG discovered that any cost increases in the overall F-35 program would mean a reduction in the number of jets Canada can order. “DND has advised that their risk mitigation strategy for acquisition costs, to remain within a $9 billion ceiling, is to reduce the number of aircraft acquired,” stated the 30-page audit, “Next Generation Fighter Capability: Independent Review of Life Cycle Cost.” “As a result, based on their own calculations of potential contingency required, this could reduce the initial fleet to as low as 55 aircraft, which is below DND’s current stated requirement.”

Senior Canadian Forces officers have said that 65 planes is the absolute minimum amount of aircraft the Air Force needs for its roles and missions.

Martin Shadwick, a strategic studies professor at York University in Toronto, warned that the rising costs of the F-35 and the 9 billion Canadian dollar cap could see Canada buying fewer fighters. “It will be extremely difficult for the Air Force to do its missions with less than 65 aircraft,” Shadwick said. “As costs go up, the numbers of planes to be purchased will go down, undercutting capability.”

He noted the original plan was to purchase 80 fighter jets to replace the 78 CF-18s now being flown. But that number was later reduced to 65. Prime Minister Stephen Harper said the number was cut because the F-35 is so technologically advanced that fewer planes are needed.

The Department of National Defence (DND) has set aside 660 million Canadian dollars for any cost overruns on the F-35 project. KPMG estimates that contingency fund should be around 2.5 billion Canadian dollars.

At the Dec. 12 news conference, MacKay reiterated that the 9 billion Canadian dollar cap still stands.

The audit gives critics of the Conservative Party government’s proposed F-35 purchase more ammunition. It found Canada’s total procurement cost for the F-35, over a 42-year period that includes development, maintenance, operation, block upgrades and attrition aircraft, will be 45.8 billion Canadian dollars. That compares to the 16 billion Canadian dollar figure originally claimed by the Conservative government as the full cost of Canada’s F-35 procurement.

Liberal Party Sen. Colin Kenny has also warned that not enough aircraft are being purchased. He pointed out that a number of F-35s are going to be lost through attrition and others will be needed for training.

Kenny said that even 65 aircraft wouldn’t be enough. “Eighty is a much more sensible number,” said Kenny, the former chairman of the Senate’s defense committee.

MacKay said the DND will look at other aircraft but did not provide a timeframe on how long that would take and would not commit to a competition.

The KPMG auditors estimate each F-35 will cost Canada around 86.6 million Canadian dollars, while the government has said it expects to buy the aircraft for around 68.8 Canadian dollars each.

MacKay explained some of the differences in figures between the KPMG audit and the DND’s price estimates by noting the audit included items such as operating costs, which were not factored in by the department. The audit also covered a 42-year lifecycle of the F-35, from development to disposal. MacKay said the DND figures were for a 20-year cycle.

Canada had hoped to buy the F-35 between 2016 and 2023. But there will be no decision on the procurement of any replacement for the CF-18s until the review process is finished and details are provided to Parliament.

Australia’s Plans

The Canadian developments came as Australia announced it will seek pricing on 24 extra Super Hornets from the U.S. government.

The announcement is the latest move in the Australian government’s Air Combat Transition Plan to mitigate a potential capability gap caused by the late delivery of its F-35As, originally due between 2012 and 2014, and an aging F/A-18 Hornet fleet.

Australia is an F-35 partner country with a requirement of up to 100 aircraft over the next few years. So far, it has committed only to the first tranche of 14 and has placed orders for only the first two aircraft, for delivery in 2014.

It earlier bought 24 Super Hornets to lessen a gap between the 2010 retirement of its F-111s and the F-35A’s arrival. Twelve Super Hornets will be converted to the EA-18G electronic warfare configuration from 2015.

A decision on whether to place an order for the additional Super Hornets will be made in 2013 and will almost certainly have an impact on the number of F-35As ultimately acquired.

“When the Super Hornets were purchased, there was a view that Super Hornets would provide effectively a transition capability between the classic Hornets and the Joint Strike Fighter,” Defense Minister Stephen Smith said last week. “I think it’s now become clear to all that the Super Hornets are potentially much more than simply a transition fleet. We will look at whether we need or want to have Super Hornets and Growlers as a long-term air combat and air warfare capability into the future as part of a mix of fleets.”

He added that they were keeping an eye on what is happening in Canada.

“We will obviously closely monitor developments in the Joint Strike Fighter program, and that’s of interest to all concerned, including Canada. Canada has to make its own judgments about its own arrangements, so I won’t reflect upon those.”

Better JSF News in Britain

Britain has committed to ordering 48 of the F-35B jump-jet versions in the current 10-year core equipment program, but Jon Thompson, the permanent undersecretary at the Ministry of Defence, told the parliamentary defense committee Dec. 12 that he expected the number of aircraft purchased to “rise over time to more than 100” aircraft.

The first production orders are expected to be placed after the government’s 2015 strategic defense review.

The MoD has taken delivery of two F-35s ordered for test and evaluation purposes and a third aircraft is in production. A fourth aircraft could be ordered next year for evaluation work.

The F-35 will fly first operationally with the Royal Air Force in 2018, followed by the Fleet Air Arm and soon after from new aircraft carriers, which are now in production.

Correspondent Nigel Pittaway in Melbourne, Australia, and staff writer Andrew Chuter in London contributed to this report.

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