Sunday, January 16

Finland pays far less for fighter jets than Norway

Finland invests in the same type of fighter aircraft as Norway, but gets them much cheaper despite the fact that Norway has been involved in the development of the F-35 since 2002.

Norway buys 52 F-35 fighter jets from American Lockheed Martin. According to the Ministry of Defense, the total purchase price is NOK 90.2 billion. The average price per aircraft is thus NOK 1.74 billion.

According to the Ministry of Defense, Norway’s 52 new fighter jets from the US Lockheed Martin have a purchase price of NOK 90.2 billion. The average price tag per aircraft is thus NOK 1.74 billion.

Just before Christmas, Finland announced that it would buy 64 fighter jets of the same type for 10 billion euros. This gives a unit price of NOK 1.58 billion.

Shortly afterwards, the Finnish broadcaster announced Yle that the purchase price for the 64 aircraft is 8.4 billion euros, which corresponds to a unit price of around 1.3 billion kroner.

In that case, Finland pays NOK 440 million less per aircraft than Norway pays on average for the same type of aircraft.

Finland has decided to buy 64 fighter jets of the same type as Norway, but expects to pay around NOK 440 million less per aircraft on average.

Confirms

– We do not know what unit price Finland pays, but since they will have their aircraft delivered in the period 2025–2031, we must expect a price level in line with the latest Norwegian aircraft, says senior adviser Lars Gjemble in the Ministry of Defense to NTB.

However, he confirms that Finland will on average pay less per plane than Norway.

– Even if Finland, as they are not a partner in the F-35 program, has to pay a surcharge on the flight price, the Finns’ average price for the aircraft themselves will be lower than what Norway has paid on average, says Gjemble.

Price fall

According to the Ministry of Defense, the explanation is that the price of the planes has fallen significantly, which Finland will now benefit from.

– Where the first aircraft Norway received in 2015 had a unit price of 114 million dollars, the aircraft that landed on Ørlandet recently had a unit price of 80.5 million dollars, says Gjemble.

Norway had thus saved significant amounts, close to 30 percent, of waiting a few years to procure the aircraft. However, Gjemle does not agree with the calculation.

– Dividing the project’s total cost by the number of aircraft does not give a good indication of the unit price for the aircraft. As a partner, Norway will always pay a lower unit price for the aircraft in a production series than what buyers outside the partnership pay, he says.

Debate on costs

The purchase of fighter jets created debate in Norway from the outset, and the same is happening now in Finland. The debate is primarily about the Finnish Armed Forces’ estimates of the so-called lifetime costs for the aircraft.

The Ministry of Defense in Norway estimates that with the current dollar exchange rate, it will cost NOK 225.8 billion to operate the aircraft for the rest of its life. This is in addition to the purchase price. Norwegian air bases must also be upgraded for NOK 8.3 billion. The total price tag for the purchase and operation of the aircraft is thus NOK 324 billion.

Finland operates with much lower estimates for lifetime costs. At a press conference last month, the director of the Finnish Armed Forces’ logistics department, Kari Renko, estimated that the total lifetime cost of 64 aircraft will be around 200 billion kroner.

In comparison, Switzerland estimates the annual operating and maintenance costs for the same aircraft to be twice as high, while the Netherlands estimates the costs to be three times as high, the newspaper points out Helsingin sanomat newspaper.

The then Chief of Defense Haakon Bruun-Hanssen and Minister of Defense Ine Eriksen Søreide were present when Norway received the first F-35 fighter jet at the Lockheed Martin factory in Fort Worth, Texas in 2015. Since then, the planes have become significantly cheaper.

Great uncertainty

This worries Deputy Director General Matti Okko in the Finnish Office of the Auditor General.

– It is precisely the operating and maintenance costs that contain the most uncertainty. We are inevitably partly dependent on the information from the manufacturer, he says Yle.

Okko also questions the purchase price of the aircraft, which is scheduled to be delivered in the period 2025–2031 and points out that considerable uncertainty can be linked to the dollar exchange rate.

The consulting company Deloitte, which has been commissioned by the Finnish Armed Forces to ensure the quality of the fighter aircraft project, also warns against attaching confidence to the cost estimates and points out that these are largely based on information from the manufacturer Lockheed Martin.

– There will be a lot of uncertainty about the costs of acquiring and operating fighter jets from the next decade onwards, Deloitte points out according to STT.

Ferrari

Also in the United States, there has long been a debate about the cost of the F-35.

Congressional Review Body Government Accountability Office (GAO) in the US, warned last summer against the high operating costs and noted that estimates for these have risen steadily since 2012.

Commander-in-Chief of the United States Air Force (USAF), general Charles Q. Brown, pointed out the same thing and stated that it will have consequences for its use.

– You do not drive your Ferrari to work every day, you only drive it on Sundays, he said almost a year ago.

The background for the statement was, among other things, USAF’s own calculation that with the current dollar exchange rate, it costs around NOK 310,000 per hour to have an F-35 aircraft in the air. The Armed Forces in Norway believe that it costs around 110,000 kroner.

Reference-www.aftenposten.no

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