Op-Ed: Fighter Delivers a Costly Lesson
(Source: The Age - Melbourne; published Nov. 8, 2010)

By Andrew Davies
Not for the first time, the Joint Strike Fighter is making headlines for all of the wrong reasons - cost and schedule overruns and cancelled orders. This is not good news when the aircraft is the planned future of Australia's air combat force.

The Australian government was an enthusiastic backer of this aircraft right from the start.

Back then we were told that the planes would be in service soon after 2010, and would replace both the F-111 and the 1980s-vintage Hornets. As well, it would be significantly less expensive than other aircraft (no modern combat aircraft could ever be described as ''cheap'') - not just to buy, but also to run. It would also provide a quantum leap in capability thanks to its stealth, sensors and weapons.

A lot has changed since then. Now the Joint Strike Fighters won't enter service with the RAAF (and possibly with some of the US services as well) until the second half of this decade. And Australia will have to wait longer for it to have a long-range anti-shipping missile - an important capability for an island nation. US government figures show cost increases of around 40 per cent and the running cost is shaping up to be higher than its predecessors. The flight test program is running behind schedule and, not surprisingly, the 20 million lines of software needed to give the JSF its electronic senses continue to cause problems.

That's the bad news. The good news is that progress is being made. The first batch of fighters and some of the second have left the factory. The third batch is under construction and the fourth is about to be contracted. It's worth noting that the contracted price is a fair bit lower than some of the ''worst case'' numbers appearing in the press. And the biggest technical problems have been in a variant of the aircraft that Australia isn't interested in.

Perhaps the most important point is that the US Air Force doesn't have a ''plan B'' and is pretty much betting its future on the JSF. So if it can be made to work it will be.

Most of these developments were predictable. To deliver as promised, the program was going to have to beat historical trends that have seen late delivery, cost growth and software and electronics problems become the rule rather than the exception. The historical average for defence programs is that prices increase 50 per cent above their initial estimates and delivery times increase by about a third. So in most respects this is almost business as usual, with the sheer size of the program ($US300 billion) just magnifying the problems.

And it's clear that the Defence Department here in Australia was aware of the potential for problems. It seems that some allowance for cost increases and delays was built into the RAAF's plans - though not as much as is required as it turned out, and some scrambling to rejig timelines (and to keep within the $16 billion budget) has been evident.

But even allowing for that, it's increasingly clear that this isn't a great way to buy military capability. Australia doesn't have the depth in its force structure or spare money in its defence budget to absorb big delays and/or cost increases without taking a hit in capability.

Time is money, especially when older aircraft, which can't provide the high performance required in any case, have to soldier on. In this case, the Howard government decided in 2007 that it had to stump up an extra $6 billion to buy 24 Super Hornets to avoid these problems.

We are getting more than new aircraft. We are also getting a very clear lesson in how to approach defence acquisition. The Super Hornets are being delivered now - right on schedule and under budget. The difference between the JSF and Super Hornet purchases is very simple. Four hundred Super Hornets have been delivered to the US Navy, and they have been in service since 2001. The production line and the aircraft are both mature, meaning that the cost and delivery timeframe were known from the start.

The RAAF's most potent aircraft today are the Super Hornets it bought ''off the shelf''. Buying into a complex research and development program isn't the way to go for a middle-sized defence force such as ours. The JSF will probably mature and overtake the Super Hornet in terms of capability in the future. That's when the smart buyers will line up and buy it.

Andrew Davies runs the operations and capability program at the Australian Strategic Policy Institute. The views here are his own.


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