Canada about to cancel F-35 purchase. Leading to a “death spiral” of order cuts?

Dec 07 2012 - 9 Comments

War veteran CF-18 Hornet multi-role fighters, heading into their fourth decade of service and due to be retired by 2020 might need to extend their service life a little bit. Or find another replacement.

This is what emerges from reports being published since Dec. 6, when the news of a possible program cancellation spread on almost all the Canadian media outlets.

Needless to say, the problem that would bring the federal government to axe the planned purchase is the stratospheric price of the controversial F-35 Joint Strike Fighter, the plane that was initially scheduled to take over the roles fulfilled by the Royal Canadian Air Force‘s Hornets.

Delays and cost overruns have raised the projected unit price from 75 million to 133 million USD, even if, in February 2012, Italian head of the agency that is responsible for the procurement of new armaments said that the unit price will be around 70 million each (Lockheed Martin estimated 65M USD for the F-35A and about 73M USD for the F-35B), less than the 79 million USD currently paid for the Eurofighter Typhoon and much less of the 121 million USD per aircraft anticipated in 2011.

Anyway, based on information coming from Canada, the fluctuating pricetag for 65 planes could bring the overall projected cost between 30 and $40 billion (depending on sources of the leaks and assumed life cycle) whereas Canada’s Prime Minister Stephen Harper and Defence Minister Peter MacKay have already stated that they are not willing to spend more than $9 billion for the F-35, according to Huffington Post Canada.

Image credit: Lockheed Martin

Although media reports have been denied by Canada’s Prime Minister’s Office, what’s certain is that every canceled plane will increase the costs of the remainder making their unit price if not unaffordable, less affordable.

Unit price depends also on the foreign sales. U.S. have commitments from allies to buy as many as 500 jets. Last year, The Economist warned that the program is in danger of slipping into the “death spiral” where increasing unit costs would lead to cuts in number of ordered plane, leading to further costs that would boost order cuts.

Dealing with the CF-18 replacement, as Business Insider’s Robert Johnson wrote:

“And let’s be honest, pretty much everything else out there is a comparative bargain to the JSF. Acquisition specialists will certainly start with Boeing’s Super Hornet, Dassault’s Rafale, Saab’s Gripen, and the Eurofighter Typhoon to replace the CF-18 fleet.”

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  • P.J Beatty

    Cancel?

    Not according to the Canadian government. The press corps is going wild with speculation and inventions but very little on facts.

    The Canadian governement did not do a good job selling this purchase to Canadians and the press in Canada, a press corps that is infected with a virulent strain of Harper Derangement Syndrome that makes US journalists with Bush Deangement Syndrone look meek in comparison, jumped all over an opportunity to slag the hated Conservatives.

    Lots of smoke here, very little light, and no fire. Just another day of “journalism”.

  • http://nickysworld.wordpress.com/ Nicky

    I think Canada should cancel the F-35 and go with the F/A-18 E/F Super Hornet, JAS-39 Gripen NG, Eurofighter or the Rafele.

  • Fil

    I don’t see how anyone could reasonably assume a price of $70 million per aircraft after the LRIP-5 contracts from March:

    F-35A: $172 million
    F-35B: $291.7 million
    F-35C: $235.8 million

    It was even independently projected to be $115M/plane as early as February 2008. Only last year did the Globe and Mail publish a “shocking” piece about how the plane was going to be $110M-$120M instead of the government’s claimed $70M figures. I was mostly shocked that $70M was still considered a credible number all these years later.

    $133M/plane seems at least sort of acheivable, though I’m still highly skeptical that they can even get that.

  • dude

    it is not “a good plane”. it is not designed to be one anyway. it is “yet another piece of air superiority puzzle” only if you have the american perspective. theres no airforce can use f-35 efficiently (in a harmony with required electronic warfare assets) but usaf. in the other hand, rcaf may be considered a defacto extension of us air defence for sure, thats why its hard to say “the purchase is not possible/reasonale” for canada. the real problem is the “unexplainable” motivation of european participants.

  • kikl

    Good news for Canada.

    Canada needs a long range interceptor in order to protect its vast airspace against enemy aircraft. An interceptor is an air superiority fighter designed to intercept enemy aircraft, particularly bombers and reconnaissance aircraft, and destroy them.

    That should be priority No. 1. Then, the aircraft should be capable of performing precison bombings. So Canada is looking for a multirole combat aircraft with a primary air-to-air combat role and a
    a secondary air-to-surface capability.

    The F-35 is a stealthy bomber. Its capabilities as fighter aircraft are secondary, since the F-22 is supposed to perform this mission for the US airforce. Consequently, the F-35 is not the right aircraft for Canada.

    Canada should choose one of the current multirole fighter. A twin engine design should be chosen like the F-15, F-18, Typhoon or Rafale. Canada should adapt the chosen plane to its particular need by extending its range using conformal fuel tanks.

  • FOX3

    An amazing amount of aviation Ignoranti comments here. Truly some clueless folks who seem to think reading a Toronto Star editorial means they know a lot about modern military avaition.

    No wonder Canadian journalists can invent the crap they come up with on the F-35. They are preaching to a clueless choir.

    • IC_Fancypants

      All over the internet there seems to be a lot of people claiming they know this or that, comparing top secret products to eachother with information you’d find on google. The fact is, that very few people would ever be able to know the true capabilities of two of the machines in this business. Unless you’re a really good spy

  • IC_Fancypants

    I’m just fascinated that the Canadian gov’t was able to make this decision without really looking into the competition, not really knowing what you’d get or how the competition would hold up compared to it. Perhaps now there will be a (hopefully fair, but I’m doubtful) open race to prove that (or if) other machines “match up to the mighty F-35″ in ability, price and gains for Canada. If the Canadian taxpayer is expected to foot the bill for this party at least their gov’t should be honest with what they’re choosing exactly and why. It’s not even like Canada is supporting a domestic industry.

    • Lynch D. Coon

      The fancy pants F-35 couldn’t win a dogfight against a P-51 Mustang.
      Just seems like it’s doing nothing but lining the pockets of the executives of Lockheed/ Martin.