Swiss F-35 Program Costs Increase by 20% in Nine Months
(Source: Defense-Aerospace.com; posted Nov. 29, 2021)

By Giovanni de Briganti
Swiss Ministry of Defense graphic detailing its planning assumptions for F-35 procurement (left) and the actual contractual figures (right) it released on Nov. 26. Both are much higher than the CHF 5.068 billion cost it claimed in June. (DDPS graphic)
PARIS --- The cost of the 36 Lockheed Martin F-35 fighters that Switzerland has decided to buy has increased by almost 20% in the nine months since the decision was announced in February, according to figures released Nov. 26 by the Swiss ministry of defense.

From 5.068 billion Swiss francs (CHF) in February, revealed in a June 30 defense ministry statement, the cost of the F-35s has now increased to CHF 6.035 billion.

No explanation was provided for this CHF 967 million increase, but the implication is that it is due to “inflation forecasts up to 2031 and anticipated payments.”

Costs increase for aircraft but not missiles

However, no similar escalation is reported for the Patriot ground-based air defense system that Switzerland is buying in parallel. Its cost was stated as CHF 1.97 billion in February, “including inflation and VAT up to the time of payment,” rising only marginally to CHF 1.987 billion as announced on Nov. 26.

For both the aircraft and missiles, the ministry says it used the same exchange rate of CHF 0.95 to the US dollar, so the implication is clearly that the F-35 cost increase is due to other, specific but unnamed factors.

Cheap, cheaper or cheapest?

The 20% increase in cost over the past nine months also calls into question the defense ministry’s claim in February that the F-35A will cost “around CHF 2 billion less than the second-lowest bidder,” which it did not identify.

That difference has now been halved to “around” CHF 1 billion, making the F-35 that much less attractive compared to its competitors.

Furthermore, it should be noted that, to date, the costs put forward by the Swiss only cover procurement and “support from the manufacturer during the rollout” phase. No financial data is provided regarding the aircraft’s future 30-year operating costs, other than to say they will take the total F-35 program costs (i.e. procurement plus operating costs) to approximately CHF 15.5 billion over 30 years.

Imbroglio over operating costs

This implies that Switzerland believes its total operating costs will amount to CHF 9.4 billion over 30 years, or CHF 315.5 million per year and CHF 8.76 million per aircraft per year.

But Norway, based on its experience with the F-35 over several years, has concluded it will spend $27 billion to operate its fleet of 52 F-35As for 37 years, which works out to $19.5 million (or CHF 18.5 million) per aircraft per year – well over twice what Switzerland has estimated.

In fact, using the same ‘real-world’ costs being paid by Norway, buying and operating 36 F-35s for 30 years will cost Switzerland CHF21 billion, instead of the CHF 16.85 billion claimed by the Swiss defense ministry.

Hurdles remain before contract signature

The Swiss government’s decision to buy the F-35, and its claims that the US aircraft offers the best performance, the lowest costs and the best protection of sovereign data of all the bidders, have raised the hackles of a wide range of domestic opponents.

The most predictable, and the most dangerous for the government, is the “Stop F-35” initiative launched August 31 by the Group for Switzerland Without An Army (GSsA) with the support of the Socialist and Green parties, to block the F-35 purchase.

The Socialist and Green parties have 83 seats out of the Swiss Parliament’s 246 seats, or about one-third. Incidentally, the GSsA estimates that the F-35 program would cost Switzerland CHF 25 billion – almost 60% more than the government estimate.

Under Swiss law, 100,000 signatures are enough to force a referendum. On Nov. 28, according to a counter on the GSsA website, “61,258 people had downloaded the petition’s signature page,” and the total had increased to 61,282 by Nov. 29.

Lucas Bürgi, the GSsA’s political secretary, said during a Nov. 29 telephone interview that the goal of 100,000 signatures could be reached by March, in which case the popular vote could be organized by late 2022 or early 2023 at the earliest. The government could conceivably sign the contracts before the petition deadline, or even before the popular vote, Bürgi said, but this is unlikely because it is aware that the petition is in motion.

In a similar referendum held in September 2017, and also sponsored by GSsA, the principle of the procurement of a new combat aircraft was approved by a paper-thin majority of 51% -- or just 8,000 votes -- and many think it probable that, based on cost factors only, the F-35 buy would be blocked if another referendum is held.

Furthermore, because of Swiss constitutional procedures, a referendum could not be held before 2023, or over two years after Lockheed’s bid was submitted, and so probably requiring further renegotiations to update the contract terms.

Parliament launches audit of F-35 purchase plans

The left-wing Socialist – Green opposition is not alone in having concerns about the government’s planned F-35 purchase.

The Business Audit Committee of the Swiss National Council (Parliament) announced Nov. 16 that it would audit “selected aspects of the evaluation process for the new fighter aircraft” of the Swiss Armed Forces “with regard to their legality and appropriateness,” adding that the relevant subcommittee will begin work in February 2022. The commission is chaired by National Councilor Erich von Siebenthal, a member of the conservative UDC party, which controls 36 seats in Parliament.

The committee said it wants to create transparency with regard to certain points of criticism that were raised in public, “in particular be to assess the methodology used when evaluating the aircraft available for selection, to investigate the allegation of the destruction of files by Armasuisse, to clarify the consideration of any political leeway in relation to the country of manufacture and to check compliance with other legal procurement principles.”

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