I came across this discussion in the Aerospace & Defense group on Linkedin (
http://tinyurl.com/2fdo8dv ), and added our own thoughts on this topic.
Firstly, I don’t think there is any question the F-35 is
envisioned to be the largest production fighter, both in terms of quantity and contract value in the next 20-30 years.
The program is primarily backed by the US, but the United Kingdom, Italy, the Netherlands, Canada, Turkey, Australia, Norway and Denmark are also participating. The US fleet of fighters is ~2400 and this is ~2x the next largest country (Russia). In addition to the US planning to replace all/most of its fighters with F-35s over time, the other partners have agreed to procurement schedules that would
bring the potential quantity of F-35s into the 3000-3100 range. This quantity does not include Israel with ~400 fighters, all purchased from the US and therefore a very likely candidate for the F-35 also.
As a point of reference, the total estimated fighter inventory of the next three largest air forces (Russia, China and
India (who has purchased a sizable number of US fighters and may also be an additional future home for F-35), is ~2600.
I am not suggesting that other fighters such as the F-16s, F-18s, Gripens, Eurofighters, MiGs etc will not compete against the F-35 at all over the next twenty to thirty years. Certainly in terms of cost, these platforms have significant advantages and this cost advantage is being augmented by technology improvements, e.g. the implementation of AESA radar. Furthermore, jointly developed platforms such as the JF-17 (Chinese-Pakistani project) will also lock out some potential sales even if the F-35 was a cost comparable option.
However, I would suggest that even if there were only one fighter competitor to the F-35 (and as we note above, there are several), no other fighter platform has the potential to reach a larger quantity than that already “committed” to for the F-35, even if the final quantities sold do not match the "committed" values.
In addition, the cost of the F-35 is significantly higher than current fighters. One estimate I saw has the cost of an F-35 ranging somewhere between $65 and $120 million (some estimates place it as high as $200 million), versus $50 million for an F-16. The substantially
higher cost per plane and large quantity will make the TAM of the F-35 dwarf that of the other fighter jets.
Now, off course the fly in the ointment also relates to the cost. With big overruns and schedule slippages, cracks have appeared in the solidarity of the 9 development partner countries. I saw some references that some countries are re-thinking whether they need the capability (and cost) the F-35 brings. On the other hand, Canada’s Defense Minister, this month, reiterated Canada’s support of the program and its procurement plans.
However, as an international program, geopolitical and purchasing pressures will leave some US-friendly countries with no alternative but to buy the F-35 and this again leads to the conclusion that we will see a potential production run approaching 3000 over the timeframe.
Another and perhaps the biggest wildcard in this analysis is the future of the program. As recently as January 2010, the
US Deputy Secretary of Defense re-affirmed US (and partner country) commitment to the F-35 program. I suppose with the US deficit growing steadily, US military strategy gearing more toward smaller, regional conflicts and a lot of resources tied up in
Afghanistan, it would not be completely surprising if there was some change in future budget allocations (think F-22/DDx/CGx ).
That would, however be a major event that lobbying would likely delay for several years.
So, short of a major upheaval in geopolitical relationships and/or a program cut,
it appears the F-35 will be both the quantity and even more so, market value leader for the next 20-30 year period.