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Friday, December 15, 2017

Buying Vintage: Examining the Cost of Purchasing Used Australian F-18s


By Christopher Cowan & Dr. Andrew Davies, CDA Institute

Image result for Australian F-18s
Royal Australian Air Force F-18 Hornet pilots wave to the crowd as they taxi down the runway after performing during the Australian International Airshow at the Avalon Airfield near Lara southwest of Melbourne on February 24, 2015.PAUL CROCK/AFP/Getty Images
The CF-18 A/B Hornet (a Canadian-variant of the same design in service with Australia and many other nations) has been the core component of Canada’s air combat capability since it was first introduced in the 1980s. The type has served the country well in overseas missions (including over Iraq, Kosovo and Libya) and at home defending North American airspace.

The road to finding its replacement, however, has been a bumpy one for the Royal Canadian Air Force (RCAF) and the Government of Canada (GoC). After a few false starts, the GoC recently announced that it will move forward with its plan to finally find a replacement for the CF-18 and secure an ‘interim’ air combat capability of 18 second-hand Hornets from the Royal Australian Air Force (RAAF) until the new jets arrive in the mid-2020s.

The GoC has been criticized heavily for its handling of the CF-18 replacement program, with many commentators highlighting the political machinations behind the supposed ‘capability gap’ that the ‘interim’ fighters were to fill. Nonetheless, the GoC has persisted with its plan, so it’s worth taking a look at what it means to buy ‘used’ aircraft.

Australia has a fleet of 71 Hornets. The first was delivered to the RAAF in 1984, roughly the same time that Canada received its first CF-18. The airframe of a F/A-18 A/B has a nominal age of 6,000 hours, which can be extended through service life management processes and structural upgrades. The United States Marine Corps (USMC) also flies F/A-18 A/B models (as well as C and D models), and has put a significant number of flight hours on their airframes. 91% of USMC Hornets have over 6,000 flight hours and 19% have over 8,000 hours, with a few aircraft approaching 10,000 flight hours.

The average RAAF legacy Hornet has flown around 4,200 hours (see page 114 in the linked document), allowing for approximately another 1,800 hours of flight time before it reaches the planned end of its service life in the early 2020s. That’s a fair amount of life left on the airframe—almost one-third of its nominal lifespan—but the RCAF may well end up with some of the RAAF’s older Hornets, which are being replaced by F-35s. Australia has done an excellent job managing its Hornet fleet; each aircraft has a through-life plan designed to minimize wear-and-tear on the airframe. It has been such a success that Australia’s legacy Hornets have seen a recent uptick in flight hours—including taking them into action over Iraq and Syria—at an age when most aircraft are being flown less often, not more. So while the Hornets the RCAF will receive will be ‘used’, they’ll likely still be in relatively good nick.

Despite being roughly the same age as the Australian Hornets, Canada’s fleet of CF-18s looks positively ancient in comparison. As of April 2016, the average CF-18 airframe had approximately 6,100 hours on it, with some airframes having over 7,000 hours on them. Structural upgrades have extended the lives of their airframes to 8,000 hours per aircraft—something that most RAAF Hornets lack. Keeping the CF-18 fleet going and relevant until replacement jets arrive in the mid-2020s will require a series of relatively minor, low-risk upgrades, but extending their lives past 2025 would likely require significant structural and avionics upgrades, so any further delay in the replacement program would be costly. And by the mid-2020s, the CF-18s will be significantly less capable than the aircraft operated by Canada’s main allies.

Getting the newly acquired RAAF Hornets up to speed once they arrive in RCAF hands will likely not be very difficult, given the cooperation between the two air forces on a number of sustainment and upgrade programs for their Hornet fleets over past few decades. There are minor differences between the two fleets—the Australian Hornets have a different avionics package for example—but the Australian Hornets should be a relatively easy fit into Canada’s air force.

Now for the kicker. According to the Australian Financial Review, the reported cost of the deal is CAD $497m (USD $388m), which works out to a unit cost of CAD $27.6m (USD $21.5m). If true, that’s an awful lot of money for used aircraft that will only be in RCAF service for around six to seven years. It’s also around one-tenth of the cost of the GoC’s now-abandoned USD$5.23 billion plan to acquire 18 new-build Super Hornets from Boeing. But the difference is that the ‘interim’ Super Hornets could’ve flown with the RCAF for 30 years, rather than six.

Nonetheless, the data suggests that the RAAF’s 18 legacy Hornets, while around the same vintage as the CF-18s, may have a fair amount of life left in them and likely won’t require significant modifications when they arrive to supplement the RCAF’s fleet. That’s good news for the RCAF, which will finally get some ‘new’ jets to take the load off of its aging fleet. In the end, this acquisition appears to be an expensive solution to an ‘interim’ problem that should’ve been avoided. While it’s strange that it will take the GoC another three to four years to decide on a replacement for the venerable CF-18, any progress is good progress in the world of Canadian defence procurement.
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~Christopher Cowan is a Research Analyst and Editor at the CDA Institute, while Dr. Andrew Davies is the Director – Defence & Strategy Program at the Australian Strategic Policy Institute.

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