We now lament the termination of the F-22 program because the supposed low cost alternative, the F-35, has turned out not to be low cost and is many, many years behind schedule and is projected to cost trillions of dollars in sustainment. Suddenly, that F-22 that was too expensive is looking a whole lot better especially in light of its vastly superior capabilities compared to the rather mundane combat capabilities of the F-35.
The F-22 program was prematurely terminated, in large part, because of its high costs. Let’s review the F-22 program costs and see if we can get a better grasp of the cost issue.
To summarize the program, the F-22 was produced from 1996-2011with a total of 195 aircraft built (8 test plus 187 operational). According to Wiki, the planned buy was 740 aircraft.(2) The first production lot contract was awarded in Sep 2000.
From Wikipedia, we see the original funding vision,
The USAF originally envisioned ordering 750 [F-22s] at a total program cost of $44.3 billion and procurement cost of $26.2 billion in fiscal year (FY) 1985 dollars. (2)
If realized, the procurement cost estimate of $26.2B for 750 aircraft would have put the procurement cost at $35M (FY85) per aircraft or $85M (FY2021) – the exact cost of the cheapest variant of the F-35, today!
Note, also, the envisioned relative proportion of development costs to production costs:
Development = $18.1B (41%)
Procurement = $26.2B (59%)
One of the problems with modern aircraft (and ship!) procurement programs is that the development costs have a tendency (absolute certainty!) to balloon which takes an otherwise possibly acceptable program from reasonable to unreasonable. We’ll circle back to this, momentarily.
Of course, the original funding vision failed to materialize. Subsequent cost increases occurred and production quantities were reduced,
The 1990 Major Aircraft Review led by Secretary of Defense Dick Cheney reduced this to 648 aircraft beginning in 1996. By 1997, funding instability had further cut the total to 339, which was again reduced to 277 by 2003. In 2004, the Department of Defense (DoD) further reduced this to 183 operational aircraft, despite the USAF's preference for 381. A multi-year procurement plan was implemented in 2006 to save $15 billion, with total program cost projected to be $62 billion for 183 F-22s distributed to seven combat squadrons. In 2008, Congress passed a defense spending bill that raised the total orders for production aircraft to 187. (2)
As production wound down in 2011, the total program cost is estimated to be about $67.3 billion, with $32.4 billion spent on Research, Development, Test and Evaluation (RDT&E) and $34.9 billion on procurement and military construction (MILCON) in then year dollars. The incremental cost for an additional F-22 was estimated at about $138 million in 2009.(2) [emphasis added]
Note the change in the relative costs of development to procurement from the original vision to the end of the program:
Development = $32.4B (48%)
Procurement = $34.9B (52%)
The development portion of the costs went from an anticipated 41% of the total program cost to nearly half. Over the entire program, the production cost was $179M (FY2011) per aircraft ($209M per aircraft FY2021).
More relevantly, the incremental cost in 2009 was $138M per aircraft. This is more relevant because it captures the economy of scale that had been achieved near the end of the production run. Compare this to the early F-35 production costs, at the same number of aircraft produced, which were running $150M - $200M+, depending on variant and whose report you choose to believe. This tells us that at equivalent points in their production (around 150 aircraft produced), the F-22 and F-35 were in the same rough ballpark of production cost. More importantly, this demonstrates that the F-22 would have continued to decrease in cost just as the F-35 has. In other words, there was no reason to have terminated the F-22 program just based on production costs!
F-35 production started at $170M+ per aircraft and has now dropped to $85M per aircraft, depending on variant. Apply that same percentage drop to the F-22 price and you get a drop from $140M to $66M per aircraft.
Costs are interesting but, ultimately, unimportant, in a sense. What matters is combat effectiveness. In that regard, the F-22 is several times more combat-effective than the F-35 and, therefore, represents a much better value for the dollar. It is this factor, combat value for the dollar that the decision makers failed to consider when they reduced and then terminated the F-22 program. Even if the F-22 wound up costing twice the F-35, it delivers several times the combat capability and that makes it a bargain, in comparison.
Also, individual aircraft procurement cost, when amortized over the life of the aircraft, is insignificant. For example, an F-22 costing $140M and having, say, a 30 year service life, is only $4.7M/yr.
Let’s also bear in mind that the real cost of the F-35 is not the supposed $80M in the most recent production lot. The real cost is the initial production cost plus the cost to retrofit capabilities that are missing from the aircraft and fixes for the various problems that the concurrency production scheme imposed. So, that early aircraft that cost $150M, or even the latest $80M aircraft, will have additional costs imposed in order to bring them up to actual combat standards. In fact, hundreds of F-35s have already been deemed either incapable of being brought up to standard or uneconomical to bring them up to standard. The cost of the hundreds of concurrency orphans has to be added to the overall program cost to produce a lesser number of actual combat capable aircraft (actual usable number of aircraft = total aircraft produced – concurrency orphans).
The F-22 was expensive, without a doubt. However, as we’ve seen, by looking only at the cost early in the production run, the costs were exaggerated and inappropriately skewed the termination decision. In contrast, the same kind of excessive costs early in the F-35 program were accepted and the economy of scale price drops eventually resulted in a production cost half or less of the initial cost. Had we let the F-22 production run continue, there is every reason to believe that we would have seen the same percentage decrease in cost.
The other overwhelming conclusion is that we terminated a program that was delivering superb combat value for the dollar and that’s always an unwise decision. This is not to say that costs can be totally ignored but it clearly says that there is more to production decisions than just cost. A better route for the F-22 program might have been to impose a production hiatus for a year or so and focus on the cost issues with the goal of resuming production with lower costs.
It is also worth bearing in mind that the F-22 was the first of its kind. No, it wasn’t the first stealth aircraft but it was the first mass produced, front line stealth fighter and, as such, incorporated many new technologies and production techniques - advances that the F-35 design and production benefited from. Again, had we taken a hiatus and worked out those firsts we could have resumed production with the production cost savings that the F-35 ultimately benefited from.
This points out the problem of running a military by business cases. Business cases tend to focus on the short term cost and exclude consideration of long term costs and non-fiscal factors such as combat effectiveness.
Finally, had F-22 production continued, the proposed naval variant might have come to fruition and naval aviation would be immensely more capable today.
(2)Wikipedia, “Lockheed Martin F-22 Raptor”, retrieved 2-Apr-2021,