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Sticker Shock:Estimating the Real Cost of Modern Fighter
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<blockquote data-quote="SuperEtendard" data-source="post: 165248" data-attributes="member: 128"><p>PARTE 2</p><p></p><p>Sticker Shock:</p><p>Estimating the Real Cost of Modern Fighter Aircraft</p><p></p><p>The average unit procurement cost of fighter aircraft produced in the NATO area is $112.43 million,</p><p>and varies in a ratio of almost 3 to 1 from $62.1 million for a Dassault Rafale C to $177.6 million</p><p>for a Lockheed F-22A. Three aircraft have a unit procurement cost of around $70 million, and</p><p>another three cost around $110 million.</p><p>When total research and development costs are added, however, the picture is very different, as</p><p>the average program unit cost rises to $148.7 million. On this basis, only two aircraft cost less than</p><p>$100 million, another costs $112 million, and two (Eurofighter and Rafale) cost around $140</p><p>million. Again, the F-22A is the most expensive, with a unit program cost of $338.8 million.</p><p>These figures can appear surprising, especially as they indicate that the Rafale costs less than the</p><p>Gripen, yet they reflect the actual price paid for these fighters by domestic customers. We opted to</p><p>disregard other prices, such as those offered on export competitions, on the grounds that they are</p><p>slewed by commercial considerations, while prices paid by domestic customers more accurately</p><p>reflect the real cost of developing and procuring combat aircraft. The methodology followed is</p><p>described on page 14.</p><p>Most intriguing is the tentative conclusion that aircraft prices (or costs to governments), like those</p><p>of other manufactured goods, are determined as much by how much the market can bear as by</p><p>their actual development and production costs (see Tables 2, 3)</p><p>This report is intended to provide an objective basis for estimating the true costs of combat aircraft</p><p>for their domestic buyers, at a time when manufacturers, locked in increasingly bitter competition</p><p>on the export market, routinely inflate the cost of competitors’ aircraft while making demonstrably</p><p>misleading claims about their own.</p><p>Table 1: Combat Aircraft Ranked by Unit Production Costs</p><p>(in millions of currency units) (prices first in local currency, then converted to $ at current exchange rates)</p><p>Aircraft Type Unit Procurement Costs Program Unit Costs Comments</p><p>Rafale C (EUR 51.8) $ 62.1 (EUR 113.2) $ 135.8 Air force single-seat (inc VAT)</p><p>Rafale M (EUR 56.6) $ 67.9 (EUR 121.4) $ 145.7 Naval version (inc VAT)</p><p>JAS-39C Gripen (Poland bid) $ 68.9 (SEK 552.9) $ 76.07 Swedish version (inc VAT)</p><p>F-18E Super Hornet $ 78.4 $ 95.3 MYP II contract</p><p>Eurofighter (Germany) (EUR 85.7) $ 102.8 (EUR 118.3) $ 141.9 Tranche 2, Dec. 2003 prices</p><p>F-15E Strike Eagle $ 108.2 Not significant FY06 order</p><p>F-35 Joint Strike Fighter $ 115.0 $ 112.5 LRIP aircraft (estimates)</p><p>Eurofighter Typhoon (UK) (GBP 64.8) $ 118.6 (GBP 78.6) $ 143.8 Tranche 2, July 2004 prices</p><p>Eurofighter (Spain) Not available (EUR 105.6) $ 126.7 Tranche 2, mid 2005 prices</p><p>F-22A Raptor $ 177.6 $ 338.8 FY06 contract</p><p>(Sources: GAO, CBO, NAO, DoD, UK MoD, French Parliament for data; defense-aerospace for analysis.</p><p>Figures are latest available)</p><p>Our ambition is not to accurately peg actual aircraft prices, but rather to provide general estimates</p><p>and a mass of data and sources that readers can use to compute their own price, depending on</p><p>their requirements, by building on the elements provided in this study.</p></blockquote><p></p>
[QUOTE="SuperEtendard, post: 165248, member: 128"] PARTE 2 Sticker Shock: Estimating the Real Cost of Modern Fighter Aircraft The average unit procurement cost of fighter aircraft produced in the NATO area is $112.43 million, and varies in a ratio of almost 3 to 1 from $62.1 million for a Dassault Rafale C to $177.6 million for a Lockheed F-22A. Three aircraft have a unit procurement cost of around $70 million, and another three cost around $110 million. When total research and development costs are added, however, the picture is very different, as the average program unit cost rises to $148.7 million. On this basis, only two aircraft cost less than $100 million, another costs $112 million, and two (Eurofighter and Rafale) cost around $140 million. Again, the F-22A is the most expensive, with a unit program cost of $338.8 million. These figures can appear surprising, especially as they indicate that the Rafale costs less than the Gripen, yet they reflect the actual price paid for these fighters by domestic customers. We opted to disregard other prices, such as those offered on export competitions, on the grounds that they are slewed by commercial considerations, while prices paid by domestic customers more accurately reflect the real cost of developing and procuring combat aircraft. The methodology followed is described on page 14. Most intriguing is the tentative conclusion that aircraft prices (or costs to governments), like those of other manufactured goods, are determined as much by how much the market can bear as by their actual development and production costs (see Tables 2, 3) This report is intended to provide an objective basis for estimating the true costs of combat aircraft for their domestic buyers, at a time when manufacturers, locked in increasingly bitter competition on the export market, routinely inflate the cost of competitors’ aircraft while making demonstrably misleading claims about their own. Table 1: Combat Aircraft Ranked by Unit Production Costs (in millions of currency units) (prices first in local currency, then converted to $ at current exchange rates) Aircraft Type Unit Procurement Costs Program Unit Costs Comments Rafale C (EUR 51.8) $ 62.1 (EUR 113.2) $ 135.8 Air force single-seat (inc VAT) Rafale M (EUR 56.6) $ 67.9 (EUR 121.4) $ 145.7 Naval version (inc VAT) JAS-39C Gripen (Poland bid) $ 68.9 (SEK 552.9) $ 76.07 Swedish version (inc VAT) F-18E Super Hornet $ 78.4 $ 95.3 MYP II contract Eurofighter (Germany) (EUR 85.7) $ 102.8 (EUR 118.3) $ 141.9 Tranche 2, Dec. 2003 prices F-15E Strike Eagle $ 108.2 Not significant FY06 order F-35 Joint Strike Fighter $ 115.0 $ 112.5 LRIP aircraft (estimates) Eurofighter Typhoon (UK) (GBP 64.8) $ 118.6 (GBP 78.6) $ 143.8 Tranche 2, July 2004 prices Eurofighter (Spain) Not available (EUR 105.6) $ 126.7 Tranche 2, mid 2005 prices F-22A Raptor $ 177.6 $ 338.8 FY06 contract (Sources: GAO, CBO, NAO, DoD, UK MoD, French Parliament for data; defense-aerospace for analysis. Figures are latest available) Our ambition is not to accurately peg actual aircraft prices, but rather to provide general estimates and a mass of data and sources that readers can use to compute their own price, depending on their requirements, by building on the elements provided in this study. [/QUOTE]
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