At a potential US$238 million per bird, we see storm clouds ahead for the F-35

At a potential US$238 million per bird, we see storm clouds ahead for the F-35

South Korea is one month away from a final decision between Boeing’s F-15 Silent Eagle, EADS’s Eurofighter, and Lockheed Martin’s F-35  as the victor in the Defense Acquisition Program Agency’s (DAPA) F-X III sixty plane procurement competition. The entire process has seen a lion’s share share of roller coaster moments, from Sukhoi dropping out, Lockeed/ROK political scandals, ROK/Boeing F-15 K problems, Silent Eagle possibly not existing, and Saab rumors.

As the end draws near, more problems continue to plague the entrants. EADS is offering a design that didn’t meet DAPA’s initial requirements, Boeing hasn’t released or shown a fully-realized F-15 SE, and now Lockheed Martin’s F-35 price tag may have exploded beyond DAPA’s expectations.

DAPA has set a 8.29 trillion won (US$7.4 billion) goal for their F-X III acquisition. Breaking down relative costs, we can derive a rough estimate of each company’s offering and how it matches DAPA’s planned expenditure.

With Boeing’s F-15 SE, we’re at a loss for credible data, since the product has yet to actually exist, but we can look at previous F-15 K sticker prices, while citing sources deriving estimates for a potential F-15 SE. South Korea’s F-X II program’s F-15 Ks came in at US$100 million each and the F-15 SE has been estimated to cost a similar amount per unit. Doing some basic math, we’re looking at about US$6 billion for a sixty plane order. Adding logistics support services, spare parts, and cost inflation, the F-15 SE will still tentatively fit into DAPA’s US$7.4 billion budget.

EADS’s Eurofighter falls into ranges between £64-£84 million per unit, varying from source to source. If we take both ends of that figure, convert them into US dollars (about 116 million) and multiply the results by Korea’s sixty plane order, we’re in the range of US$6.1 to US$8.1 billion, still playing in DAPA’s relative ballpark.

For the best look at Lockheed Martin’s F-35 costs, sales negotiations with Japan have revealed an overall price of US$238 million per unit. While this cost relates directly to expected sales with Japan and includes various bells and whistles reflective of that specific deal (extra engines, performance based logistics, etc), they are features that South Korea would also potentially require to maintain their new purchases’ combat viability. Sixty units would double DAPA’s estimated expenditure, at around US$14.3 billion for total acquisition.

These are obviously rough estimates, and the Eurofighter and F-15 SE could easily see higher costs than the above projections. Unfortunately, inflation and additional technologies will not result in double the expected/estimated prices. Either DAPA will pay a lot more money than they’re expecting, Lockheed Martin will cut the price of their F-35 in half (making Japan look foolish), or Boeing/EADS will walk away with a sixty plane order in June.

My money’s on the latter, and I remain convinced that Boeing will walk away a winner.

 

 

 

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Craig was born & raised in the United States, having recently returned there after over five years in Asia. He is currently pursuing further education in the realms of East Asian Studies and Politics. Craig is an avid fan of the political, economic, and military machinations occurring throughout the Asian continent and how those turning gears affect the rest of the world. He's currently covering both North and South Korea for Asia Security Watch, enjoying shedding light on to this far-too-often ignored slice of Asia.
Craig Scanlan has 82 post(s) on Asia Security Watch