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The Cost of Replacing Today's Air Force Fleet

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CONGRESS OF THE UNITED STATES CONGRESSIONAL BUDGET OFFICE The Cost of Replacing Today’s Air Force Fleet DECEMBER 2018 Notes The years referred to in this report are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. All costs are expressed in 2018 dollars. For the years before 2018, costs are adjusted for inflation using the gross domestic product price index from the Bureau of Economic Analysis. Costs for years after 2018 are adjusted for inflation using the Congressional Budget Office’s projection of that index. On the cover: An F-15C Eagle during takeoff. U.S. Air Force photo by Staff Sergeant Joe W. McFadden. www.cbo.gov/publication/54657 Contents Summary 1 Today’s Air Force Aircraft and Their Replacement Costs 1 BOX 1. MAJOR AIRCRAFT IN THE AIR FORCE’S FLEET AND THEIR PRIMARY FUNCTIONS 2 How CBO Made Its Projections 5 Projected Costs of New Fighter Aircraft 6 F-35A 7 Light Attack Aircraft 7 Penetrating Counter Air Aircraft 8 Managing Procurement Costs in Peak Years 9 Appendix: Composition of the Current Air Force Fleet and CBO’s Estimate of Replacement Costs 11 List of Tables and Figures 18 About This Document 19 The Cost of Replacing Today’s Air Force Fleet Summary different missions (seeBox 1 and the appendix). They The U.S. Air Force has about 5,600 aircraft, which range range widely in age from the 75 new aircraft that entered in age from just-delivered to 60 years old. Many of those service in 2017 to the 21 60-year-old KC-135 tankers aircraft—including the costly-to-replace F-16C/D and that entered service in 1958. The largest share of the F-15C/D fighters, F-15E multirole fighters, C-130 cargo fleet is 26–30 years old; those aircraft entered service in aircraft, and B-1B bombers—are nearing the end of their the late 1980s and early 1990s, funded by the defense service life. In this report, the Congressional Budget buildup of the 1980s (see Figure 1). Office estimates the cost of replacing those aircraft. Because the future national security environment and • Replacement Costs. CBO projects that replacing the future Air Force budgets are unknown, projections out aircraft in the current fleet (essentially one-for-one) to 2050 are quite uncertain. A system’s retirement may would cost an average of $15 billion a year in the be accelerated or postponed, or it may be retired and 2020s. That figure would rise to $23 billion in the not replaced. Increased capabilities of new aircraft may 2030s and then fall back to $15 billion in the 2040s. also allow for less than CBO’s default assumption of In comparison, appropriations for procuring new one-for-one replacement of existing aircraft. Moreover, aircraft averaged about $12 billion per year between new systems that do not replace existing systems 1980 and 2017. (All amounts are in 2018 dollars.) may emerge, such as the Air Force’s remotely piloted aircraft (RQ-4 Global Hawk, MQ-1 Predator, and • Methods. The projections are based on publicly MQ-9 Reaper) that emerged in the 1990s and 2000s and articulated procurement plans for some aircraft did not directly replace any existing systems. and, for aircraft without such plans, on their typical retirement age; the projections do not take into A long-range projection is nevertheless useful because it account the costs of development, operations and can assist the Congress, the Department of Defense, and maintenance, modifications, or personnel associated the Air Force in setting appropriate budgets for procur- with aircraft. ing new aircraft. It can also identify key future issues— when too many programs might need procurement • Uncertainty. Replacement costs would be lower if the appropriations at the same time, for example, or when Air Force decided to extend the service life of some retained aircraft are growing too old—and give decision- aircraft or if the costs of procuring some aircraft were makers enough time to address them. lower than CBO projects. Replacement costs would be higher if the opposite occurred. CBO projects that costs of procuring new aircraft would rise above $15 billion during the mid- to late 2020s Today’s Air Force Aircraft and and peak at about $26 billion in 2033. A Penetrating Their Replacement Costs Counter Air (PCA) aircraft (which may replace F-15C/Ds The Air Force’s fleet includes about 2,000 fighter and and F-22s), the F-35A, and the B-21 would be the larg- attack jets; 150 long-range bombers; 1,100 airlift, cargo, est contributors to that year’s peak. Costs of procuring and utility planes; 450 tankers; 500 reconnaissance and new aircraft would not fall below $20 billion until 2039 electronic warfare aircraft; 1,200 trainer planes; and and would remain above typical historical levels past 150 helicopters and tiltrotors.1 Those aircraft perform publication/51535. Tiltrotor aircraft can position their rotors like 1. For more details about the Air Force’s force structure, see a helicopter’s for vertical takeoff and landing or position them Congressional Budget Office, The U.S. Military’s Force like a fixed-wing aircraft’s propellers for higher-speed horizontal Structure: A Primer (July 2016), Chapter 4, www.cbo.gov/ flight. 2 THE COST OF REPLACING TODAy’s AIR FOrcE FLEET DECEMBER 2018 Box 1 . Major Aircraft in the Air Force’s Fleet and Their Primary Functions Fighter and Attack Aircraft A-10 F-15C/D F-22 Close air Air Air superiority, support superiority ground attack F-16 F-35A Multirole: Multirole: ground attack, ground attack, air superiority air superiority Airlift Aircraft C-17 Long-range C-5 transport C-130 Long-range Medium-range transport transport C-21 UH-1 Passenger Utility transport and cargo (helicopter) transport Trainer Aircraft T-38 Advanced pilot training 0 100 200 300 400 500 feet Continued DECEMBER 2018 THE COST OF REPLACING TODAy’s AIR FOrcE FLEET 3 Box 1. Continued Major Aircraft in the Air Force’s Fleet and Their Primary Functions Bomber Aircraft B-1B B-2 B-52 Long-range Long-range Long-range ground attack ground attack ground attack Tanker Aircraft KC-10 KC-135 Aerial refueling, Aerial refueling, long-range long-range transport transport Reconnaissance Aircraft MQ-9 Reaper RQ-4 Global Hawk Remotely piloted Remotely piloted reconnaissance and high-altitude ground attack reconnaissance Other Aircraft HH-60 MV-22 Combat search Special Operations and rescue Forces (tiltrotor) (helicopter) 4 THE COST OF REPLACING TODAy’s AIR FOrcE FLEET DECEMBER 2018 Figure 1 . Age and Replacement Cost of the Air Force’s Fleet, 2018 Number of Aircraft 1,200 Many of the aircraft in the current 800 fleet entered service during the defense buildup that occurred during the 1980s. 400 0 Replacement Cost Billions of 2018 Dollars 120 The aircraft with the highest total 80 replacement cost are about 30 years old (predominantly 40 B-1Bs, F-15C/Ds, and F-16C/Ds). 0 1–5 6–10 11–15 16–20 21–25 26–30 31–35 36–40 41–45 46–50 51–55 56–60 Entered service Aircraft Age as of Fiscal Year 2018 Entered service in 2017 in 1958 Source: Congressional Budget Office, using data from the U.S. Air Force. 2045. Although the Air Force could probably modify the projected costs of procuring new aircraft: the F-35A, both retirement plans and replacement schedules to the PCA aircraft, the KC-46 tanker, the B-21 bomber, a smooth out the 2033 peak, the average annual costs of C-17 replacement cargo aircraft, and the C-130J cargo procuring new aircraft would still be higher than in the aircraft. CBO projects that the F-35A would be the recent past: $15 billion in the 2020s, $23 billion in the most expensive program through the late 2020s. When 2030s, and $15 billion in the 2040s. funding for procuring the PCA aircraft would be needed in the early 2030s, however, that program would become The Air Force’s annual appropriations for procuring new the most expensive until the late 2040s (see Figure 4). aircraft peaked in 1986 at about $29 billion but then trended downward until the late 1990s (see Figure 2). The largest replacement costs are clustered around In CBO’s projection, the procurement costs of new aircraft ages 26–30 and 31–35 years old (see the lower aircraft would not reach the 1986 level, but they would panel of Figure 1). Those aircraft entered service in the rise to and remain at levels considerably above historical mid-1980s through early 1990s (most prominently, the averages (see Figure 3). The Air Force’s annual appropria- B-1Bs, F-15C/Ds, and F-16C/Ds). Another cluster of tion for procuring new aircraft averaged about $9 billion aircraft with large replacement costs is now more than between 2010 and 2017 and about $12 billion between 55 years old (mostly KC-135s and B-52s). 1980 and 2017, including the 1980s buildup. Although CBO’s projections address changes in the Air CBO’s estimate includes 35 different replacement sys- Force fleet through 2050, the agency formed no judg- tems, but six programs make up more than 85 percent of ment about whether the new aircraft procurements in its DECEMBER 2018 THE COST OF REPLACING TODAy’s AIR FOrcE FLEET 5 Figure 2 . The Air Force’s Appropriations for Procuring New Aircraft, 1980–2017 Billions of 2018 Dollars 30 Appropriations 25 for Procuring New Aircraft 20 Average Appropriations for Procuring New Aircraft, The Air Force’s appropriations 15 1980–2017 for procuring new aircraft rose in the 2000s (but did not approach 10 the peak seen in the 1980s) and then fell in the 2010s.
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