Well that’s actually a very good question. For the most part, reading about it in the media won’t satisfy your curiosity because you never know which cost they’re talking about as they sling figures around.
If you read the media you’ll find various costs used without identifying which cost category the number is based upon.
What am I talking about? Well when talking about the costs of fighter aircraft, there are many different cost categories that can be cited. But without being specifically identified, the reader has no idea what those costs include.
Here’s a handy-dandy chart to give you an idea of what I’m talking about that I found on a blog post that pretty well explains the cost categories and why you have to be careful when quoting numbers but not knowing the cost category it comes from.
Quite a list, isn’t it?
What brought this all to mind was an article by AIN in which the cost of the F-35 is discussed. They actually do what I find to be proper – they identify the cost category (even describe it) when they put out a number:
According to the latest GAO report, the program acquisition unit cost (PAUC) of the F-35 will be $161 million. That figure includes amortization of the development cost across the expected production run.
But that brings us to point two. Very rarely, when discussing the cost of an aircraft, is the PAUC used. Instead, that number is traditionally expressed as the URF or Unit Recurring Flyaway cost. The cost to the service to buy the aircraft from the producer and fly it away.
So what is the current URF of an F-35? Well according to Lockheed Martin:
In the latest U.S. selected acquisition report (SAR), the average URFC is given as $78.7 million for the F-35A, $106.5 million for the F-35B and $87 million for the F-35C,in 2012 dollars. That assumes a total production run of 2,443 aircraft for the U.S. plus 697 for the international partners and 19 for Israel.
Well, you say, that’s significantly higher than buying, say, an F/A 18.
Not necessarily. As production of the aircraft ramps up and assuming a full buy (over 3,000 aircraft total), the URF will continue to come down as production efficiencies kick in.
Additionally, when talking about buying legacy aircraft, you’re again not necessarily talking apples to apples.
Prime contractor Lockheed Martin has said it expects that in today's dollars, the unit recurring flyaway cost for the Air Force variant of the F-35 would be $60 million - about what the latest version of the F-16 costs. You can get a Navy F/A-18 Super Hornet for less, but it isn't stealthy like the F-35, and its price tag doesn't include the cost of mission equipment, such as targeting pods, which are included in the F-35's price tag.
The F-35 comes mission capable as a part of the URF price. The legacy fighters do NOT come mission capable at that price. Mission equipment is then added to the price after the fact, driving up the cost to that much nearer to the F-35’s URF.
So when talking cost and throwing around figures, it pays to be careful to understand upon what basis the figure was calculated. Don’t be afraid to ask. Is that a PAUC, URF, APUC or Total Ownership Cost. My guess is most won’t know. If not, please refer them to this post.