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Still Cost Effective; The F-35 May Be the World's Most Expensive Weapons Program - But it is Set to Become the Cheapest Modern Fighter in the West

July 15th - 2018

The F-35 Joint Strike Fighter program, indented to develop a next generation replacement for the fourth generation F-16 Fighting Falcon, produced its first combat ready aircraft in 2014. The new fighter is to serve as a lighter and less costly counterpart to the F-22 Raptor twin engine heavy air superiority fighter, just as the F-16 before it did for the F-15 Eagle. Unlike the Raptor and Eagle, the F-35 is not designed to contend with elite enemy combat aircraft in air to air combat and has only limited defensive air to air combat capabilities.

The F-35 is set to become the most expensive weapons program in history by a considerable margin at over $1.6 trillion. As the cost of the fighter program continues to rise however, the cost of each individual fighter jet built under it has shrunk rapidly as production gains momentum. While fighters produced in 2015 cost well over $150 million each, by January 2017 the price fell to $95 million (prices in 2016 dollars.) Indeed, the unitary cost is likely to fall to approximately $80 million assuming expansion of production continues apace. This is possible as a result of the program's vast economies of scale, as while development costs of the fighter are in the hundreds of billions of dollars, almost 3000 aircraft are planned which will share the cost per unit between them. Over two thirds of F-35 fighters planned are set to enter service in the U.S. military, and American orders are vital to driving down the unitary costs of the fighter. It is in this way that the most expensive fighter program in history, produced in large enough numbers, can bring out a platform which is price competitive and at least somewhat cost effective. While the heavier F-22 Raptor's development cost a fraction of that of the F-35, with only 187 Raptors produced (195 including prototypes) these costs cannot be shared out in the same way resulting in each Raptor costing approximately twice as much as an F-35.

Economies of scale have been a key advantage of U.S. light fighters over rival platforms produced by competing manufacturers. The F-16 was in much the same way produced in very large numbers, with over 4,500 entering service with the United States and its allies around the world, and a key to its export success was its low unitary cost and resulting price competitiveness due to the high demand from the U.S. military itself. While the F-16 cost more than the F-15, its heavier counterpart, to develop, its unitary cost was also approximately half. The Falcon was a cheaper and lighter analogue to the Eagle much as the F-35 is to the F-22 today - and as the F-5 was to the F-4 in the Vietnam War era.

The F-35 is set to become the cheapest, and likely the most cost effective, modern Western made fighter in the world. While China and to a lesser extend Russia can benefit from large economies of scale for their fighter programs due to high domestic demand, European producers notably cannot. Indeed, Western European defence industries generally have notoriously poor cost effectiveness relative to their American counterparts, particularly in military aviation, a result of a number of factors including strong currencies, high labour costs and a relative lack of experience in the field. Even the new Swedish Gripen E light fighter, comparable to but in many ways less capable than America's F-16, is set to cost considerably more than the F-35 and over double the price of the Fighting Falcon. Twin engine European fighters such as the Rafale and Eurofighter, while lacking the F-35's fifth generation technologies which European defence firms are yet to develop, are also set to cost considerably more per unit to acquire than the F-35 despite their similar weight and role. The result is that the F-35 is highly likely to become the least costly modern combat aircraft produced in the West, and could well almost completely phase European platforms out of export markets in future should export controls eventually be lifted or scaled back. It is as a result of the scale of production, a highly prized asset, that the American fighter will, despite coming from the most expensive weapons program in military history, be less costly than both the F-22 Raptor and rival Western platforms. 

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