Media Still Missing Real Story: Thanks to Peter MacKay’s Fudged Numbers, “Official” Cost of F-35s Now Exceeds $127,000 Per Flight-Hour
I have to say, it’s pretty depressing that not one of the many, many professional journalists in Canada is literate enough to read a government report. To their credit, some are trying. But they also had a whole press briefing slash lock-up slash sleazy play-time with the people they’re supposed to be holding accountable. It doesn’t seem to have helped them anyway.
Here’s the thing I tried to make clear in my long meander through the report, I tried to make clear that the real story here was that DND appeared to be fudging the usage numbers and life cycle expectations for the F-35. Somehow the media appears to have blissfully blown right by this fact. (I do hope readers can point me to an exception; they’ll get a gold star.)
Some did notice that the headline figure “$45 billion over 42 years” didn’t quite square with the fact that DND’s $45 billion estimate actually included 30 years of actual flight time. (The other 12 years are development and delivery time, and DND claims the clock is already running on that; more on that in the next post.) Andrew Coyne did a good job of trying, for instance. He still missed the main story. Even that was too much for some of his readers, who, judging by the comments section, fear that the whole thing has been cooked up by Liberal sympathizers to make Justin Trudeau look good.
Anyhow, here’s the real issue: in addition to playing dirty with the estimates, Minister Peter MacKay and the Department of National Defence have massively slashed the lifetime they plan to use the F-35s for, massively slashed the amount of flight-time they say the F-35s will see during that lifetime, and massively slashed the simulator budget. The only important thing they haven’t slashed is the number of planes we’re buying. It’s worth asking why, if we’re going to use them less often and for less time, we actually need 65 of them in the first place. How was this number picked? By a random number generator, perhaps?
We don’t know how long the F-35 will be used for. None of us really know. But the military does have a planned life cycle, subject to change. The actual cost estimate for the F-35 must be based on that life cycle, again subject to change. For instance, the cost of the F-35 will be different if we’re going to use it for 20 years than if we’re going to use it for 30 years, or 42 years. Or what have you. It’s like owning a car: the sticker price is just the first and biggest of many, many payments you’ll be making over the life of the vehicle. In this case, operating the F-35 costs more than buying it, so the longer you use it, the more it costs.
This was the second scandal over the Auditor General’s report a few months ago, which I noticed but which the professional media mostly missed. Aside from hiding $10 billion in operating costs, the real story the Auditor-General discovered was that while Defence Minister Peter MacKay was releasing public cost estimates drawn up on the assumption that the planes would only be used for 20 years, in reality DND planned to use the fleet for “at least” 36 years, at which time the planes would begin reaching the end of their planned life expectancy of 8000 flight-hours. That averages out to 18.5 flight-hours per month for each plane. Keep that number in the back of your mind, because we’re coming back to it.
At the time the media was mainly hung up on the missing operating costs figure, but there was also a major internal review the government ordered, parts of which were subsequently farmed out to KPMG (which has now been paid a substantial sum to conduct, among other things, an external review of an internal review by DND prompted by an external review by the Auditor General of an internal procurement process in DND which has in the meantime been transferred to Public Works, all of which is an efficient use of taxpayers’ money if ever there was one). That one was premised mainly on recalculating the cost over a more reasonable time frame.
Which is where we get the 42 year/32 year/20 year debacle that’s now playing itself out in the professional media. But hidden below that is another problem. This one is arguably even more important, because it relates directly to how DND got to the estimate of $45 billion for the F-35. As everyone who has ever owned a car knows, it’s not just how long you own the car that matters. What really matters is how much you use it. The same is true, obviously, of aircraft.
Now, DND says that the F-35 will be good for 8000 hours in the air. That doesn’t mean the F-35 will simply fall out of the sky at 1 minute past. It does mean that replacements will be urgently needed by then. (We’re still flying those pesky Sea King helicopters, after all, which Peter MacKay’s gross negligence has delayed the arrival of replacements for too, incidentally.) The Auditor-General pointed out this spring that at DND’s planned usage rates, the 8000-hour figure wouldn’t be reached for 36 years, and that DND’s planning documents showed they were hoping to use the F-35 for “at least” the full 36 years. The Auditor-General didn’t know how much the extra 16 years of flying operation would cost, but he said DND would be able to tell us. So far they haven’t.
Instead, what they’ve given us is an entirely new plan, based on an entirely different estimation of flight hours. It used to be that the planned usage of these plans was going to be somewhere in between 18.5 hours per month (the Auditor-General’s figure) and 20.2 hours per month (the actual usage of the CF-18 fighters currently in use, which DND says it was initially planning to use the F-35s for). Now, in order to hold the operating costs down to $45 billion, what they’ve done is shrink the actual usage down to 15 hours per month.
The official reason for doing so is hidden in the cursory notes at the bottom of the report: “to reflect the increased use of simulation.” That can’t be the whole truth, because the very next line, hilariously, adds that “the number of… simulators has been adjusted from 12 to eight to reflect current plans”! So we have will pilots getting less simulator training, flying planes for less time. But we’re getting the same number of planes! Why is that, again? Is there some planned future battle where Canada will need to field exactly 65 planes, no more and no less, or our side will lose?
Anyhow, it’s when you combine the new flight restrictions with the new lifetime adjustments that you get the criminal negligence of Minister MacKay’s new “plan.” At CF-18 level usage, which DND says it used for its original estimate, each plane would have seen an average of about 7300 hours’ use after 30 years. In other words, they’d be well on towards the end of their life by then. They’d keep using them for at least another 6 years at that point, and how long they lasted would depend on how well the 14 or so replacement airframes held up. (DND would buy about 14 F-35s, over and above the public figure of 65, in order to cover accidents, losses, and write-offs.)
That’s changed. Under the new figures, by the time the fleet turns 30, the average plane will only have been in the air for 5400 hours. It will have 30% of its expected lifetime still ahead of it. Of course it will be pretty long in the tooth since then. So either we’ll be replacing the F-35 before we reach the end of their useful life expectancy, at an even greater cost to the taxpayer, or we’ll be dragging these things with us into at least the 2060s, if not the 2070s. In short, the best-case scenario is that the F-35 will be the next Sea King.
There can be no apparent advantage to such a strategy except for the following: the new DND figures don’t actually reflect the planned reality any more than the last ones did. Either DND is already preparing for the possibility that they won’t get all 65 planes, or they’re lying about how much they plan to use them, or they’re dissembling about how long they plan to use them. Assuming Minister MacKay has not simply gone off the deep end, one of those three things must be true. You can decide for yourself which it is, and why, exactly, it’s going over so well in the Prime Minister’s Office that Peter MacKay still has a job.
All of which leads me to my headline. Last spring, DND’s figures implied that the F-35 would cost $25.1 billion over 20 years at 15,800 flight-hours per year for the whole fleet. That averages out to a cost of $79,400 per hour to buy, equip, and fly the F-35.
This winter’s figures are rather different. DND now says that the F-35 will cost $44.8 billion over 30 years at 11,700 flight-hours per year. By my math, that averages out to a cost of $127,600 per hour.
Every time an F-35 takes to the air, several Canadians have to work for an entire year to keep it up there.
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kootcoot
” or we’ll be dragging these things with us into at least the 2060s, if not the 2070s”
Maybe we should ask the Chinese what kind of planes they would like to operate, since long before then they will be directly running what used to be Canada! That is unless they shoot them all down when we join the US Air Foreign Legion in an attack on Beijing and Shanghai!
Rural
It would be interesting to see what the typical flight time per month of our existing fighters are, both during ‘normal’ times and during ‘ operational’ times (when deployed to some world crisis). I also wonder what the flight crews will be doing if they are only actually flying the aircraft an average of less than an hour a day. We know maintenance time far exceeds flight time on such sophisticated aircraft but it seems they will be sitting on the ground ‘just in case’ most of the time. Lets have multiuse aircraft that can be used for more routine patrols and be better utilized.
Its getting hard to see the aircraft for the exhaust smoke…..
Kev
I emailed the authors of a NYT piece that quoted the 42 year number pointing out that they should have used the 30 year one as that is the proper time frame.
Here is their response
“While DND is certainly having fun with figures, the lifespan question and the KPMG report is a complicated issue.
While the report consistently uses 30 years throughout, the total cost figure the report cites is based on DND’s application of the KPMG costing framework, an application that used a 42 years lifespan. In other words, it’s the figure the government released yesterday. Despite the 12 year difference, KPMG takes no issue with DND’s accounting. That may be because its second report describing the costing framework show that the program costs become very low during the final years of operations and, of course, any thing over three or four decades is, at best, a rough estimate”
So because KPMG choose not to dispute their clients interpretation then we’ll just go with the spin. Truthiness in all it’s glory
Sixth Estate
Those reporters have just proved they don’t know what they’re talking about.
The current framework they refer to states the F-35 will be flown for 30 years, following 12 years of development and acquisition. Operating costs are spread over a 30-year period. Anyone who says that we just released numbers showing it would be flown for 42 years is an ignoramus.
Sixth Estate
Rural — DND’s report says the current CF-18 fleet logs 15,000 hours per year.
I’m not sure how many of the CF-18s are still operational, so I don’t know what the average per plane would be. But assuming (just for the sake of comparison) that there are 65 operational CF-18s, that would average out to a little over 19 hours per month. Again that’s just a hypothetical figure.
The rest of the time would be spent training, etc. DND’s report says that they can spend less time in the air because the pilots will be spending more time in the simulators. But then they cut their simulator budget by 30%.
Sixth Estate
Kev — Here’s what the New York Times reporters apparently should have read and didn’t, from what you’re saying. I quote KPMG directly:
“The current Estimate is based on a flying program of approximately 11,700 hours per year. Based on a fixed flying program of 11,700 hours per year, 65 aircraft F-35 fleet would have an average age at retirement (30 years) of only 5,400 hours. Considering the current airframe structural life is approximately 8,000 flying hours, each plane on average would have approximately 2,600 hours, or one third, of its structural life remaining at the end of 30 years. It should be noted that this flying hour calculation does not include an allowance for operational hours.
The above highlights the potential residual life of the F-35 fleet on retirement which should be studied to help ensure its potential use is adequately reflected in future estimates.”
Kev
I’m with you 100% as are many others, unfortunately the corporate media has decided to go with the government’s spin instead. Why, could be laziness, an unwillingness to admit an error or cowardice. Which ever it is it reflects poorly on them and highlights how difficult it is for us to properly inform the public.
MoS
Excellent piece, again, 6E. It’s likely that a fifth to a quarter of these aircraft will never be in operational service at any given time. Some are held in reserve, others are in for routine periodic or even major maintenance. I understand these are particularly high maintenance aircraft.
As to your question, why 65? That is because of the purpose to which the F-35 is intended to be put. It is to have a pool of ready aircraft and pilots to form our contingent to a future allied (American) air campaign.
This is not a fighter aircraft. It’s not an interceptor. It’s not an air-superiority fighter. It’s not a ground support, strike fighter. It is a supposedly stealthy light bomber with a minimal self-defence capability and nothing else. It is an offensive weapon system designed to penetrate heavily defended enemy airspace and take down some high-value ground target and then exit just as quickly as possible. Straight line in, straight line out. It’s optimized for that and that alone.
Sixty five aircraft is calculated on the size of contingent Canada could expect to contribute to America’s aerial Foreign Legion in a future conflict. Why America? Because it alone operates all the support aircraft the F-35 requires to operate in heavily defended enemy airspace. That takes more than tankers and AWACS. And America alone operates the stealth fighters, the F-22s, that would have to defend the F-35 against defending fighters in an adversary’s airspace.
To me the cost issue has always been secondary and even an unfortunate diversion from the real discussion we’re not having about what the F-35 means for Canada’s foreign and defence policy in the coming decades. We’re becoming a Legion in America’s imperial military apparatus.
Anyone who cannot grasp the truly dire significance of this should read Andrew Bacevich’s “The New American Militarism.” Among other points, he explains how the threat or use of military force has come to displace diplomacy as his country’s principal instrument of foreign policy. In America’s operational theatres abroad, commanding generals now resemble Roman Consuls.
The F-35 levers Canada straight into this bizarre, perverse militarism. We have seen how well that worked for the Americans in Viet Nam, Iraq and Afghanistan and the latter war taught us how well it also works for Canada.
Sixth Estate
MoS — I don’t dispute any of that except for the figure 65. It still seems completely arbitrary. There is no number of F-35s Canada could supply that the U.S. Air Force would actually need in combat, except as a token gesture. So while I’m certain you’re correct that the F-35 will never be used in combat except alongside the Americans, I fail to see why 65 aircraft is the appropriate number for that task, as opposed to, say, 50, or 90, or what have you.
MoS
I expect they figured out what sort of a force Canada might be expected to provide for a campaign of a foreseeable duration then worked from there. You need so many spares, so many training aircraft, an appropriate number of pilots and instructor pilots, plus aircraft and pilots for the Cold Lake testing facility. They kicked it around and someone, presumably Boss Harp, decided 65 would do the job nicely.
Sixth Estate
Someone’s going to have to show me the math on that before I accept it.
The Sixth Estate » Postmedia Goes Fact-Free on F-35 Fighter
[...] years of operating cost estimates. Indeed, they were so proud about finding it that they all missed an even more extreme adjustment buried a little deeper in the report. Plus, the 20-year “life cycle” estimates have [...]
Gord
“Canadian Forces links severe adverse reaction to H1N1 flu vaccine, arranges access to a Alberta Health Services neurologist within 1 week and paid for multiple tests at private clinics ”
In 2009 I received the H1N1 shot (AREPANRIX by GSK GlaxoSmithKline) and had a severe adverse reaction to the vaccine. The CF advised “I confirm that you did receive the H1N1 vaccine on 18 Nov 2009 and as a results suffered an adverse reaction comprised of multiple complex symptoms (neurological, cardiac, respiratory, and gastrointestinal)” which include: dizziness, vertigo, irregular heart rhythms, shortness of breath, muscle weakness and pain, and numbness in hands and feet. The Department of National Defence (DND) paid for immediate access to private clinics such as Medical Imaging Consultants to expedite testing which included Chest X rays (requested 8 Dec 2009, performed 9 Dec 2009), Fluoro scan (performed 26 Jan 2010), Chest Xray (performed 27 Jan 2010), MRI (requested 3 Mar 2010, performed 5 Mar 2010), a referral to a Neurologist at the University of Alberta Hospital (requested 16 Mar 2010, performed 22 Mar 2010), Spinal Tap (requested 16 Mar 2010, performed 13 Apr 2010). My physical fitness changed from marathon fit to that of a 70 year old in a matter of days. In 2012 the Canadian Forces advised “it is our opinion that your adverse reaction to the H1N1 vaccine, resulting in a syndrome of complex symptoms, is service related”. It’s unfortunate the military forced me to release from the CF in 2011 and suffer three years of severe symptoms before they admitted the cause was the vaccine.