Royal Norwegian Air Force news and discussion

Grand Danois

Entertainer
53 million US Dollar flyaway cost for F-35A? (current exchange rate)

I would suspect they were using outdated LM cost projections? Cuz that number should roughly match what LM projected in 2001 (!) for F-35A (47m), perhaps adjusted for inflation/exchange rate only.

Edit: It's not the 2001 exchange rate btw. That would put the cost projection for 48 F-35A at 20.5 billion NOK back then.
The 18 billion NOK is in 2008 NOKs., However, the NOK is currently floating and has lost value (though it's likely to regain it). I would guesstimate that when they did the calcs earlier this year, the quote in USD would have translated to 20-21 billion NOK or ~60 million USD apiece.
 

Grand Danois

Entertainer
There was an article in AW&ST today regarding the F-22. It had a small section at the bottom regarding the F-35 cost.

Link to article

I'm no expert on "then-year dollars", perhaps someone here might straighten it out, but it sounds like Norway got a sweet deal (or they'll be ripped off later on when it comes to spares and mx)
Those are "Fiscal Year Dollars" or 2009 dollars. The reason the F-35s cost so much is because they're LRIPs.
 

kato

The Bunker Group
Verified Defense Pro
20-21 billion NOK or ~60 million USD apiece.
humm... 20.5 - 21 billion NOK in 2001 exchange rate was 47 million USD apiece (depending on March or June rate). Exactly the LM cost projection back then.

Coincidence?
 

Grand Danois

Entertainer
humm... 20.5 - 21 billion NOK in 2001 exchange rate was 47 million USD apiece (depending on March or June rate). Exactly the LM cost projection back then.

Coincidence?
18 billion 2008 NOKs, circa 60 million 2008 USD a couple of moths ago and 53 million 2008 USD now. Per plane. The numbers are based on the 2008 RBI from LM and are not 2001 projections.

Vurderingene av kostnadene er basert på fastsatte krav til levetidskostnader slik det fremkommer i KKD og sett opp mot kandidatenes svar på RBI.
 
Last edited:

Grand Danois

Entertainer
GD, could you elaborate? Is the Gripen more expensive than you expected, or is the F-35 cheaper than you expected?


V
Gripen is more expensive than expected. The F-35A comes in on the mark. 58-63 million USD (2008) or 79 million USD (Then Year).

From preliminary reading it seems that SAAB was unable to come up with fixed cost estimates for a lot of items, adding a lot of uncertainty to the cost - which I gather is why Gripen ends up as more expensive in TCO. My suspicion is that normalizing cost estimate reliability to "JSF levels" has added generously to Gripen NG TCO.

The real surprise is fly-away. But it's now seems clear that the numbers used in public was for a very "lite" Gripen NG. It also suggests that upgrading a "4th gen" to a "4.XYZ" is more expensive than one should think.

But these are my thoughts - not solid facts in any way.
 

roberto

Banned Member
Bingen has absolutely no economical sense - JSF is exactly the type of expenditure you can afford in a recessionist economy.

JSF is also cheaper than the Rafale and EF. He only thinks it is more expensive.

EF was the plane that was built for the 1980's European battlefield, so wrong again.

There are so many people who are going to wish they had not say the things they have, in a couple of years.

Particularly that ex-fighter-jock working for Norwegian.
JSF have no contribution to any economy instead it is debt burden. The best thing for governments is to freely distribute econo box cars to all the population of world who own SUVs or big cars because the amount of money that is printed to get out of the this crises combined with lack of investment in Oil development is recipe for disaster in coming years. Auto companies are getting bankrupt so they cannot invest inalternative.

This is a defence site, not an economic theory site, so why is this relevent?

1st Warning.

AD
 
Last edited by a moderator:

Grand Danois

Entertainer
JSF have no contribution to any economy instead it is debt burden. The best thing for governments is to freely distribute econo box cars to all the population of world who own SUVs or big cars because the amount of money that is printed to get out of the this crises combined with lack of investment in Oil development is recipe for disaster in coming years. Auto companies are getting bankrupt so they cannot invest inalternative.
I'll agree that "econo box cars" would be even better spent money or perhaps on infrastructure. However, there is an requirement for jets for the US military and USG needs to spend money to keep the economy running. The debt would have mounted regardless how the money is spent, so you don't cancel planned projects - that would be contraction of expenditure. You place orders for new projects, preferably infrastructure on top of existing projects.
 

harryriedl

Active Member
Verified Defense Pro
No. My bad. It includes LRIP and FRP and in then year dollars. It's WSC, not fly-away. This is without checking up on tables, etc.
would that also include sunk R&D costs as well [im only asking as Norway seems to have the predicted price] and was wondering how the disparity could occur apart adding LRIP
 

Grand Danois

Entertainer
would that also include sunk R&D costs as well [im only asking as Norway seems to have the predicted price] and was wondering how the disparity could occur apart adding LRIP
No. It is without R&D. The disparity comes from 1) LRIPs and 2) that figure is in then year dollars (TY, 2036).

The binding offer to Norway from LM, fly away:

18 billion NOK for 48 F-35A. At the time of the offer, 2008, this would equate to 60M USD / jet, fly away 2008 prices.

Right now, because the NOK has lost value to the dollar these past months, 18 billion NOK only 48 x 53 million USD. So the actuak cost is 20-21 billion NOK.
 

kato

The Bunker Group
Verified Defense Pro
When would the Norwegian Airforce actually be outfitted with these aircraft?
Afaik, they're reserving signing until 2014, which would likely mean complete delivery around... 2018-2020.

60 million flyaway is not that unbelievable for a F-35 Block from around that time (otherwise, one would never get the 83 million average current predicted for the USA).
 

Grand Danois

Entertainer
When would the Norwegian Airforce actually be outfitted with these aircraft?
Afaik, they're reserving signing until 2014, which would likely mean complete delivery around... 2018-2020.

60 million flyaway is not that unbelievable for a F-35 Block from around that time (otherwise, one would never get the 83 million average current predicted for the USA).
2016-2020. The jets are ordered three years in advance, so 2014 may be a tad late. The average 83 million then year dollars means that the USAF is going to pay an average 70-73 million 2008 dollars per jet. The c. 10 million 2008 dollars difference between what Norway pays and what USAF pays is due to the USAF buying LRIPs.
 

tphuang

Super Moderator
You can read their conclusions on cost in this document page 40 (in Norwegian):

http://www.regjeringen.no/upload/FD/Temadokumenter/Fremtidig-kampflykapasitet_anbefaling_311008.pdf

48 jets:
Gripen NG fly-away 24 billion NOK (they added 4 billion NOK to the Gripen to make it multirole).
F-35A fly-away 18 billion NOK.

Total Cost of Ownership, 30 years, 56 JSF is 145 billion NOK, which is 20-30 billion less than Gripen NG. That's 1 billion USD.

Analysen for Gripen NG viser at et kostnadsbilde for de identifiserbare kostnadselementene er 20-30 milliarder kroner dyrere enn JSF i et 30-års levetidsperspektiv.

The numbers in the table above this quote (tabell 2.) indicate that they calculate there is a 15% chance of a JSF cost overrun of more than 20 billion NOK.

I must admit I'm quite puzzled that the F-35A should be cheaper.
I almost choked when I saw that, there is no way that is true. US is paying 3 billion USD for the 17 F-35s they ordered for next fiscal year (if I remember correctly). I know that's more than the cost when mass production hits in, but I doubt they will actually lower fly away cost to $53 million. That's almost ridiculous.

Even if we take the most stripped down F-16 block 50, it's fly away cost was around $45 million a couple of years ago. And when you go from that to F-35, it's $53 million in today's dollar. Heck, I think the flyaway cost for super hornet is even higher than that right now.
http://www.navytimes.com/news/2008/10/navy_aviationbudget_100508w/
According to the naval aviation budget for 2009, USN is ordering 23 super hornets for 1.6 billion. That works out to be about $70 million each. Does anyone think F-35 will be cheaper than super hornets? Sounds like a case of people lying about figures to get their choice across.

Gripen is more expensive than expected. The F-35A comes in on the mark. 58-63 million USD (2008) or 79 million USD (Then Year).

From preliminary reading it seems that SAAB was unable to come up with fixed cost estimates for a lot of items, adding a lot of uncertainty to the cost - which I gather is why Gripen ends up as more expensive in TCO. My suspicion is that normalizing cost estimate reliability to "JSF levels" has added generously to Gripen NG TCO.

The real surprise is fly-away. But it's now seems clear that the numbers used in public was for a very "lite" Gripen NG. It also suggests that upgrading a "4th gen" to a "4.XYZ" is more expensive than one should think.

But these are my thoughts - not solid facts in any way.
Did they get any kind of real economist to do these inflation analysis? The people in LM and Norwegian air force are so clueless about this. With the current account deficit in US, we'd be lucky if the inflation doesn't go up 50% by 2016.

F-35 is a better choice than Gripen NG, but using cost as the main argument has little validity imo.
 

Vivendi

Well-Known Member
Some "sensitive" info from the evaluation has leaked to VG already:

http://www.vg.no/nyheter/innenriks/artikkel.php?artid=534207

google translate:

http://translate.google.com/translate?u=http%3A%2F%2Fwww.vg.no%2Fnyheter%2Finnenriks%2Fartikkel.php%3Fartid%3D534207&hl=en&ie=UTF-8&sl=no&tl=en

Basically they say that in simulations with future PAK-FA Gripen did not have acceptable survivability. They also say that when using NATO requirements Gripen did OK but with the much stricter requirements from the Norwegian DoD Gripen simply does not meet the requirements. PAK FA shot down Gripen in this competition.

I am also a bit surprised about the high TCO estimates for Gripen. In the press conference they said 145 billion NOK for F-35 and "20-30 billion NOK more for Gripen", 165-175 billion NOK for Gripen sounds like a lot. Saabs own estimates were below 70 billion I believe. I cannot explain the huge difference. Saab clearly disagrees with Norway on these figures; They would not have entered the competition if they expected Norway to estimate Gripen's TCO to be so much more higher than the competitor, they learned that leasson in Austria... It could be political: SV, a minority party in the goverment simply has to accept a plane that is not just significantly better but also much cheaper, there simply will not be any discussions.

It will be interesting to see how this will affect sales of not just Gripen but also other 4.gen fighters like Rafale and Typhoon in the future. The Norwegian evaluation clearly demonstrates that 4. gen planes will not survive in the future battle space: "In a brief perspective of 5-10 years from now, Gripen would still have been a very good aircraft, but we need to look 20-30 years ahead, and then there was little doubt, " Mr. Diesen said.

From a military point of view, no doubt the best plane was chosen -- now we just have to wait and see if LM can deliver not just on technology but also on costs and timelines... still very interesting times ahead!

V
 

Dalregementet

New Member
Well, well - according to norwegian media, the coming SU PAk-FA is what the Norwegian air force expects to counter and that also was a key factor behind the final decision. I don´t buy the argument on cost though...

For Gripen - Next stop Switzerland. :)
 

Grand Danois

Entertainer
I almost choked when I saw that, there is no way that is true. US is paying 3 billion USD for the 17 F-35s they ordered for next fiscal year (if I remember correctly). I know that's more than the cost when mass production hits in, but I doubt they will actually lower fly away cost to $53 million. That's almost ridiculous.
No it isn't. Explanation follows.

Even if we take the most stripped down F-16 block 50, it's fly away cost was around $45 million a couple of years ago. And when you go from that to F-35, it's $53 million in today's dollar. Heck, I think the flyaway cost for super hornet is even higher than that right now.
http://www.navytimes.com/news/2008/10/navy_aviationbudget_100508w/
According to the naval aviation budget for 2009, USN is ordering 23 super hornets for 1.6 billion. That works out to be about $70 million each. Does anyone think F-35 will be cheaper than super hornets? Sounds like a case of people lying about figures to get their choice across.
First of all, F-18 SH is a twin engined jet - add 7-10M dollars over a single-engined jet.

Second, F-18 SH and F-16 are currently build at handmade-prototype numbers - which makes them much more expensive. This is the same thing that killed the Gripen cost advantage. It's assumed low price was dependent on large build quantity - if they didn't sell significantly more Gripen NG beyond Norway, the Gripen would be much more expensive - a risk Norway was unwilling to take.

THE REASON WHY GRIPEN IS MORE EXPENSIVE THAN THE F-35 IS THE SAME REASON WHY F-18 SH IS MORE EXPENSIVE! THE JSF IS GOING TO BE PRODUCED IN 3100+ NUMBERS AT RATES OF ABOVE 200 A YEAR - ECONOMIES OF SCALE. THE CURRENT PRODUCTION RATES AND TOTAL PRODUCTION NUMBERS OF RAFALE AND GRIPEN GIVES THEM A "HANDMADE PROTOTYPE USED AT SQUADRON LEVEL PRICE TAG!"

I'll add to that the the jump in price from Gripen to GNG is due to poorly defined costs of the development from a 4 to a 4.5 gen platform, caused by the unknown quantity to be built.

The F-18 SH and F-16 have large total production quantities, but are CURRENTLY produced in small numbers - high current unit cost.

Notice that in fact F-18 build rates are higher than Gripens and that capability-wise - this is the league Gripen NG would be in at full development - the F-18 SH/GNG prices are roughly compatible.

Sorry, but I'm fairly tired of explaining this over and over.


Did they get any kind of real economist to do these inflation analysis? The people in LM and Norwegian air force are so clueless about this. With the current account deficit in US, we'd be lucky if the inflation doesn't go up 50% by 2016.

F-35 is a better choice than Gripen NG, but using cost as the main argument has little validity imo.
Numbers have been checked over and over and over by auditors, economists, etc. from many many countries!

The recommendation from Norway included risks analysis at high confidence levels, two private consultancies guaranteeing best practices and the national audit office!!!

The JSF is gonna kill the market on capability and cost - that's the reality. That's why it is under vehement attack from people trying to put the bombtruck label on it.

But you know, the Norwegians chose on capability grounds - the Gripen NG was murdered by the PAK-FA in simulations - Gripen could do Afgh style ops and Cruise missile defence - but failed at offensive/defensive counter air!!!
 
Last edited:

Grand Danois

Entertainer
Well, well - according to norwegian media, the coming SU PAk-FA is what the Norwegian air force expects to counter and that also was a key factor behind the final decision. I don´t buy the argument on cost though...

For Gripen - Next stop Switzerland. :)
Yup, there are orders out there for Gripen (and GNG) to scoop up. Competing with F-35 makes the Gripen NG a much more expensive and risky jet, than the standard product out of Saab.
 

Vivendi

Well-Known Member
In addition to questioning the TCO costs of Gripen, one may also question the costs related to VLO maintainance for F-35:

http://www.aviationweek.com/aw/blogs/defense/index.jsp?plckController=Blog&plckScript=blogScript&plckElementId=blogDest&plckBlogPage=BlogViewPost&plckPostId=Blog%3a27ec4a53-dcc8-42d0-bd3a-01329aef79a7Post%3aa7c941d8-6d85-4983-9820-9f2ced02d5e5

Overall, the F-35 is expected to need about 25 man-minutes less LO work per flying hour than the F-22 - which is not a lot, and could simply reflect the fact that the F-35's single exhaust is much simpler than the two 2-dimensional vectoring exhausts of the F-22.
http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSN2035135720081120

Young said there were also struggles with low-observability and other issues that he did not name.

"Clearly, (there's) work to be done there to make that airplane both capable and affordable to operate," he said.

The F-22 had failed to meet most of its "key performance parameters" in operational tests last year and the trend was negative. Maintenance manpower hours per flying hour had gone up since previous tests, with the last one a "substantial" increase, he said.
So: F-22 VLO maintanance seems to be more time-consuming and more expensive than originally estimated. The question is if we will see this also with F-35?

Also, it raises the question how Russia, with no experience with building stealth fighters, and a shaky economy, will succed in not just building but also maintaining a stealthy fighter jet.

In any case, F-35 has of course other advantages than ultra-low RCS; low IR signature, excellent EWS, and probably also the best sensors. But I do fear that it will cost much more than what the Norwegian DoD believes. Not to purchase, but to maintain and operate. Fuel consumption is not reduced by producing 3000+ fighters, neither is VLO maintainance :(

V
 
Top