Replacements in the wings as F-35 jet woes mount

As the Tories batten the hatches ahead of an auditor general’s report expected to be highly critical of the F-35 fighter jet procurement, indications are the government now intends to move into a holding pattern on the controversial project, awaiting further developments in the U.S. and internationally before making a final decision on a purchase, which could come between six months and a year from now.

Meantime, defence industry players in Ottawa are quietly laying the table for what many now expect will be the eventual unwinding of the sole-sourced program, which has been plagued by delays, technical glitches and cost overruns, to be replaced by an international competition. The likeliest contenders, should there be a competition, are U.s.-based Boeing, maker of the F-18 Super Hornet, and Dassault of France, maker of the Rafale.

Both are twin-engined aircraft, which adds an element of safety in the Far North that the single-engine F-35 does not have. The Rafale, like the F-35, comes with radar-evading stealth technology and, insiders say, could be built almost entirely in Canada. The Super Hornet has the advantage of being in wide use already around the world, and would be highly “interoperable” both with NATO air forces and with Canada’s existing, aging fleet of CF-18 Hornet fighters. Both aircraft makers, proponents of a competition say, would offer greater access to their aircraft’s so-called “source code,” than Lockheed Martin has been willing to provide for the F-35.

“In our world we’re already in a competition,” one industry insider said. “(Associate Defence Minister Julian) Fantino himself said we’re basically looking at our options. There’s a team at (Department of National Defence) looking at the market. So it’s already on.”

For the past six months, as first reported here last October, the Harper government has been increasingly perplexed internally, while putting up a brave face externally, as it became clear that the original costing for 65 F-35 planes, at $9 billion, was no longer realistic. With service costs factored in, the original cost estimate was actually closer to $16 billion. Parliamentary Budget Officer Kevin Page has projected the planes would cost closer to $30 billion, all in.

The reality is that no one now knows how much 65 F-35s will cost, because the number of planes to be built and the timetable are in question and the unit price in any given production year depends on both. The Pentagon has pledged to buy 2,443 of the planes. International partners, of whom there were eight originally – Canada, Australia, Denmark, Italy, the Netherlands, Norway, Turkey and the United Kingdom – had been expected to buy an additional 700, give or take. But delays and cancellations have led to an upwardly spiralling price, which has created further pressure for more cancellations. The Pentagon itself recently dropped 13 aircraft from its 2013 buy and postponed 179 unit purchases between next year and 2017.

Following meetings of the consortium in Washington and in Sydney, the Pentagon last week sought to reassure its partners (recently joined by Japan, which has pledged to buy 42 F-35s, as long as costs don’t rise further) that there will be no more delays. Apparently not reassured, Fantino last week for the first time raised the prospect of pulling out. Last Friday, he reiterated that the government’s base budget of $9 billion for new fighters is fixed. The implication is that a climbing unit price necessarily means fewer planes, or perhaps a different plane altogether.

This raises further complications, however, because the Royal Canadian Air Force’s mission parameters for defending Canadian air space require, at minimum, 65 planes. The existing CF-18 fleet had been projected, with upgrades, to last until 2017 or 2018. Last week, Fantino, again for the first time, raised the prospect of extending the life of the CF-18S to 2020-23.

Flying reduced numbers of new F-35s alongside older CF-18S may therefore be an option. Additionally, the government is considering buying up to half a dozen Reaper armed drones, which, though not a substitute for piloted craft, could be used in an expeditionary role

The bottom line, though, is that any additional significant change in Lockheed-martin’s timetable or costing, could be the tipping point that pushes the Conservatives to start from scratch, allowing them to do so without losing standing with the U.S. and other allies. Insiders note that the original F-35 memorandum of understanding states that procurement is to be done according to each nation’s standards and laws – meaning that holding a competition would not violate the letter of the agreement, as long as the F-35 had a fair shot at competing.

International fighter aircraft also likely to be in the running, should there be a competition are the Eurofighter Typhoon and the Saab JAS 39 Gripen. Eurofighter is deemed unlikely to make an aggressive bid, because one of its partner developers, British-based BAE Systems, is already deeply involved in the F-35 program. Swedish manufacturer Saab is hampered by Sweden’s not being a member of NATO.