VSMUT
Topic Author
Posts: 1350
Joined: Mon Aug 08, 2016 11:40 am

Danish JSF plans in trouble

Mon Dec 04, 2017 10:09 am

It looks like the Danish plans for buying the F-35 are in major trouble. The government has been caught lying on several subjects, and the costs are uncontrollably on the rise.

Latest news is that the F-35 will exceed noise limitations at Skrydstrup airbase, and now the air force will have to expropriate nearby housing, just like Norway did. That this would be necessary was denied by the ministry of defence back when the decision was made, but it now turns out that they knew all along. These "unexpected" costs are to be funded from the same budget.

https://www.dr.dk/nyheder/penge/ministe ... a-luftbase

Work is now well under way to prepare the airbase in Skrydstrup for the F-35, but despite having had over 10 years to plan it, by October costs had skyrocketed by over 50%. Again, out of the same budget.

http://nytkampfly.dk/archives/10129

And as if that wasn't bad enough, the national audit has found major shortcomings in the plans. The government has been adamant that 27 F-35's were enough to fulfill the Danish requirements. According to the audit, the aircraft will fail to deliver the expected 250-290 flying hours per year. By comparison, Norway only expects to fly 168 hours per year. It is estimated that at least 3 more jets will be needed to fulfill Danish requirements.

https://ing.dk/artikel/saadan-har-forsv ... bet-207308

In order to fund the F-35s, the military is now forced to find savings elsewhere. So far it looks like one of the Thetis-class arctic patrol vessels will be retired (at a point where Russia is building up forces in the Arctic), and a Diana-class patrol vessel sold off. There are also plans to shut down the Air Force Training Center, among many initiatives.

https://olfi.dk/2017/08/22/nyordning-so ... 3-eskadre/

But Danish politicians are easily distracted, and have already pledged to build up a Baltic Brigade and procure missiles for the frigates. It remains to be seen how much funding will actually be left behind for this disastrous aircraft. This is on top of a number of scandals that have cost the country a minor fortune, and the continued wishes by the current minority government for tax cuts.
 
User avatar
ssteve
Posts: 1289
Joined: Fri Dec 02, 2011 8:32 am

Re: Danish JSF plans in trouble

Mon Dec 04, 2017 3:43 pm

They're still coming to Vermont after all the noise NIMBY fights here, and the EIS admits that F-35s are just plain louder than F-16s. The 18 VTANG F-35s are planned for 300 "operations" each per year, so yeah, perhaps less than 300 flight hours. I can hear the F-16s flying and they tend to incur 4-6 "operations" rather quickly some days. But maybe that adds up to more hours. I dunno.

That said, the costs of procuring property adjacent to a base must be small potatoes compared to the cost of the jets themselves.
 
Ozair
Posts: 1812
Joined: Mon Jan 31, 2005 8:38 am

Re: Danish JSF plans in trouble

Mon Dec 04, 2017 10:48 pm

VSMUT wrote:
Latest news is that the F-35 will exceed noise limitations at Skrydstrup airbase, and now the air force will have to expropriate nearby housing, just like Norway did. That this would be necessary was denied by the ministry of defence back when the decision was made, but it now turns out that they knew all along. These "unexpected" costs are to be funded from the same budget.

The information on the noise level of the F-35 has been public knowledge for years. The below graphic from P&W is from 2016 but the same info has been available since 2009.
Image


VSMUT wrote:
Work is now well under way to prepare the airbase in Skrydstrup for the F-35, but despite having had over 10 years to plan it, by October costs had skyrocketed by over 50%. Again, out of the same budget.

Where has the ten years to plan for the F-35 come from? The F-35 wasn’t selected until 2016 and the airframes won’t start delivery until 2021.
As with the Norway hanger issue, I’m not sure why this should be in any way connected to the F-35. The UK is undertaking extensive work to upgrade the facilities at RAF Marham to accommodate F-35B and the RAAF is doing the same in multiple locations that seem to be running to time and budget. Are the Danes and Norwegians just bad project managers?

VSMUT wrote:
And as if that wasn't bad enough, the national audit has found major shortcomings in the plans. The government has been adamant that 27 F-35's were enough to fulfill the Danish requirements. According to the audit, the aircraft will fail to deliver the expected 250-290 flying hours per year. By comparison, Norway only expects to fly 168 hours per year. It is estimated that at least 3 more jets will be needed to fulfill Danish requirements.

It is certainly possible to run the jets for that many hours a year I think the question has always been whether the Danes would have the personnel to support that hourly commitment.
From an availability perspective, today the later LRIP F-35s are significantly exceeding mean time between failure expectations (see slide 5 here http://www.f-16.net/forum/download/file.php?id=25693 ) and that will only improve with full rate production. If we look at USAF F-16s, the RAND Corporation did a study in 2013 https://www.rand.org/content/dam/rand/pubs/technical_reports/TR1200/TR1275/RAND_TR1275.pdf that showed USAF active duty F-16 squadrons were flying an average of 316 hours per year, with less numbers for reserve units and much higher numbers for operational squadrons. I did see a reference somewhere to the number of flight hours the USAF were flying with F-35s and it was 300+ but will have to dig that up.
The issue then is, if pilot numbers and funding those pilots are the concerns, that would actually only increase if another airframe had been selected given their increased numbers and the savings the Danes see from using Luke AFB for initial training with other F-35 operators.
VSMUT wrote:
In order to fund the F-35s, the military is now forced to find savings elsewhere. So far it looks like one of the Thetis-class arctic patrol vessels will be retired (at a point where Russia is building up forces in the Arctic), and a Diana-class patrol vessel sold off. There are also plans to shut down the Air Force Training Center, among many initiatives.

The funding numbers are still valid and there is every chance that the F-35 acquisition will come in under budget given production rate increases and further cost reduction efforts underway. How Denmark decides to fund the military is the big question.
Denmark currently runs at 1.2% of GDP for its military budget. Compare that to the early 1980s when they were receiving F-16 where it peaked at 2.4% of GDP. https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS?locations=DK
There is only so much money to go around and so it should be no surprise that with such a low budgetary allocation that they have to make hard choices on what to retain and what to let go.
The following from Avweek has some further info on the Government’s response to the audit report.
The Danish defense ministry has begun the process of purchasing its F-35 Joint Strike Fighters.

Government publications published on Nov. 16 reveal the defense ministry has requested 16.374 billion Danish Krones ($2.62 billion) to buy the 27 F-35As, engines, four simulators and a pool purchase of spares, support equipment, modification work and upgrades up to 2026.

The Danish purchase will take place in phases, with a contract and order for 10 aircraft expected to be signed in 2018. Four of the aircraft will be delivered in 2021, and six in 2022. The purchase of the remaining 17 aircraft will be carried out through a “series of subsequent payments,” through 2027. The Danish aircraft will be initially delivered to Luke AFB, Arizona, to support initial pilot training; other nations operating F-35s have followed the same procedure. The aircraft will then be transferred in stages to the Danish air base at Skrydstrup, near the German border, which will become Denmark’s main F-35 operating base in 2022.

The documents state that although all the Danish F-35s will be based in-country from 2022, “there may be a need for an additional training flight in the U.S.”

Copenhagen says its aircraft will be delivered in two configurations: The first 10 will be delivered in Technology Refresh 2 (TR-2), while the remaining 17 will arrive in TR-3, which will bring several changes to the cockpit. Several companies, including Elbit and Harris, have already declared their involvement in these upgrade packages. The first 10 aircraft will be upgraded to TR-3 standard later.

Work to prepare the Skrydstrup airbase for the F-35 is expected to cost around 650 million Krone, although the documents say this does not cover contingency work in case of crisis and war, which would mean that additional investments might be needed. Permission to begin construction is expected in 2019.

Denmark’s 27 F-35s will replace a roughly 48-strong fleet of F-16 Fighting Falcons, which have been upgraded to Mid-Life Update standard. The F-16s will be used for national defense tasks until 2023. In 2024, F-16 and F-35 operations will be briefly concurrent until the F-35 assumes the role entirely in 2025. Copenhagen will not be able to perform any international missions with its fighters in 2022-27 as the air force transitions between the two types, although the F-35 could perform “limited international operations” beginning in 2025 if needed.

Copenhagen says the costs associated with the program are uncertain, but the defense ministry estimates it will take 57 billion Krone to maintain the fleet up to 2049. This is based on each aircraft being flown around 250 hr. per year. The documents state that the number of pilots now flying the F-16 will be trimmed to 62 from 70 to “contribute to a smoother transition from the F-16 pilot structure to the F-35 pilot structure.”

Based on those numbers, each Danish pilot can expect to fly around 110 hr. per year. Aircraft availability is expected to be around 72%, which the documents say should be possible thanks to the increased reliability seen in later production series model aircraft.

The defense ministry says its assumptions are “ambitious, but realistic” and that the capacity built into the program will be able to meet Copenhagen’s political needs. However, a need for additional aircraft is not ruled out.

The documentation was released just weeks after the Rigsrevisionen, the country’s national audit office, questioned whether the 27 F-35s would be capable of delivering all the required tasks. The report, published at the beginning of November, said that assumptions associated with flying hours may lead to underestimates in the costs allocated to cover risks, which it says could lead to increased life-cycle costs.


http://www.aviationweek.com/combat-aircraft/f-35-procurement-process-begins-Denmark
 
vr773
Posts: 39
Joined: Sun Oct 15, 2017 5:10 am

Re: Danish JSF plans in trouble

Tue Dec 05, 2017 7:08 am

VSMUT how dare you attack a holy cow!? ;)

Brace yourself for a long back-and-forth where the pro F-35 group is going to zoom in on a small details related or unrelated to the points you made, using arguments directly from the LM playbook, thinking that this would debunk the larger point that a) the majority of foreign F-35 customers are not well prepared to fly the aircraft at this point in time and b) they probably shouldn't have bought in the first place and used the money more wisely instead.
 
User avatar
Dutchy
Posts: 4065
Joined: Sat Nov 03, 2007 1:25 am

Re: Danish JSF plans in trouble

Tue Dec 05, 2017 3:31 pm

The Dutch Airforce also has a budgetary problem, financing the 37 F-35's. For the current budget, only 34 can be acquired. They said because of the Euro/Dollar, but isn't much of the work done in the Euro zone?
Many happy landings, greetings from The Netherlands!
 
wingman
Posts: 3252
Joined: Thu May 27, 1999 4:25 am

Re: Danish JSF plans in trouble

Tue Dec 05, 2017 10:13 pm

Are the noise regulations lifted during time of war or do any attacking air forces also need to meet the criteria?

Dirty bombs go in the garbage, plastic explosives go in the recycling!

The EU will win WWIII with regulations I bet.
 
prebennorholm
Posts: 6644
Joined: Tue Mar 21, 2000 6:25 am

Re: Danish JSF plans in trouble

Wed Dec 06, 2017 12:17 am

Ozair wrote:
Where has the ten years to plan for the F-35 come from? The F-35 wasn’t selected until 2016 and the airframes won’t start delivery until 2021.

Denmark has been a Level 3 Partner for F-35 development since May 2002. Denmark was actually the second Level 3 Partner to sign up, only preceded by Canada. As partnership fee we paid $110M to the development budget.

During those 15 years Danish aerospace company Terma has also been a development and production partner with Lockheed-Martin. All F-35s flying in the world today include Danish developed and produced components, and there are no plans to change that in the future. Some minor composite strutures and wiring systems are produced here, as are the gun pods for the B and C models.

For eight years from 2008 until 2016 the Royal Danish Air Force participated in F-35 testing and evaluation at Edwards AFB, Among other things one Danish F-16BM was stationed there during that period used as chase plane, and to keep Danish F-35 test pilots current.

The final decision to buy was just postponed until it had proved itself in the air.

There never was any real doubt that either the F-35 program would fail, or Denmark would buy it for F-16 replacement. It didn't fail, and then we bought.

Since this purchase runs into the thousands of dollars for every single Danish tax payer, then it has of course created some political noise. That noise has so far been a carbon copy of when we bought the F-16. I am old enough to remember.

The current noise problem with the future F-35 base neighbors will of course be solved one way or another. Some neighbors are currently having $-signs in their eyes, seeing an opportunity to sell their houses to the air force at a fortune. (Or even better, get a healthy compensation and stay living in their nice houses).
Always keep your number of landings equal to your number of take-offs
 
Ozair
Posts: 1812
Joined: Mon Jan 31, 2005 8:38 am

Re: Danish JSF plans in trouble

Wed Dec 06, 2017 12:34 am

prebennorholm wrote:
The final decision to buy was just postponed until it had proved itself in the air. There never was any real doubt that either the F-35 program would fail, or Denmark would buy it for F-16 replacement. It didn't fail, and then we bought.

I agree 100% that the F-35 was the choice to make but the point then is that while a competition was run no matter which aircraft was chosen those same upgrades to the airfield would have been required. The airfield works then are independent of the aircraft chosen because the replacement timeframe for the F-16 was already in place.
 
VSMUT
Topic Author
Posts: 1350
Joined: Mon Aug 08, 2016 11:40 am

Re: Danish JSF plans in trouble

Fri Dec 08, 2017 9:15 pm

Latest news:
Much was made of how cheap the F-35 would supposedly be to operate back when the Danish decision was made. The estimate back then was 57 billion DKK over 30 years, and was promised to be 99% correct. The ministry of defence has now admitted that the actual costs will be much higher, possibly as much as 100 billion DKK for a 30 year period, an increase of roughly 75%.

http://nytkampfly.dk/archives/10498
 
Ozair
Posts: 1812
Joined: Mon Jan 31, 2005 8:38 am

Re: Danish JSF plans in trouble

Fri Dec 08, 2017 10:11 pm

VSMUT wrote:
Latest news:
Much was made of how cheap the F-35 would supposedly be to operate back when the Danish decision was made. The estimate back then was 57 billion DKK over 30 years, and was promised to be 99% correct. The ministry of defence has now admitted that the actual costs will be much higher, possibly as much as 100 billion DKK for a 30 year period, an increase of roughly 75%.

http://nytkampfly.dk/archives/10498

That is an interesting evaluation. From the article this is what they compared against,

• Exchange rate between US Dollar and Danish kroner
• Real growth in salary
• Real growth in prices
• Payments for maintenance of Joint Strike Fighter by external supplier
• Joint Strike Fighter's consumption of fuel
• Fuel price
• Economic impact of the risks of the Joint Strike Fighter
• Price on aircraft and engine.

Given the Danish Government used the same cost evaluation criteria to evaluate all three if we swapped out anything JSF specific for the other respective competitor what do we get for price increases for the acquisition and sustainment of the Eurofighter and the SH?
 
VSMUT
Topic Author
Posts: 1350
Joined: Mon Aug 08, 2016 11:40 am

Re: Danish JSF plans in trouble

Fri Dec 08, 2017 10:25 pm

Ozair wrote:
Given the Danish Government used the same cost evaluation criteria to evaluate all three if we swapped out anything JSF specific for the other respective competitor what do we get for price increases for the acquisition and sustainment of the Eurofighter and the SH?


Well you wouldn't get the exchange rate issue with the Typhoon. The Typhoon offer also included a German state guarantee to provide the entire package at a fixed price. Only fuel and salary would have been affected had the Typhoon been selected. That option would also have allowed for funding via the EU Defence Fund, which is for EU manufactured equipment only.
 
Ozair
Posts: 1812
Joined: Mon Jan 31, 2005 8:38 am

Re: Danish JSF plans in trouble

Sat Dec 09, 2017 12:20 am

VSMUT wrote:
Well you wouldn't get the exchange rate issue with the Typhoon. The Typhoon offer also included a German state guarantee to provide the entire package at a fixed price. Only fuel and salary would have been affected had the Typhoon been selected. That option would also have allowed for funding via the EU Defence Fund, which is for EU manufactured equipment only.


A couple of points if we look at each point separately,
• Exchange rate - Currency fluctuation would still have been present, although very minor given the values are calculated in Danish Kroner and not Euros.
• Real growth in salary - Still present for all candidates.
• Real growth in prices - Still present for all candidates. A fixed price acquisition cost may have been available but that doesn't cover long term sustainment.
• Payments for maintenance of Joint Strike Fighter by external supplier - Still present for all candidates. The Danes would still have the pay Boeing and Eurofighter for maintenance.
• Joint Strike Fighter's consumption of fuel - Still present for all candidates. Logic that all three consume fuel.
• Fuel price - Still present for all candidates.
• Economic impact of the risks of the Joint Strike Fighter - Still presents for all candidates. All three were offering industrial work. The difference is only one could garuentee that their airframe's primary custoemr would be operating the jet past 2060.
• Price on aircraft and engine. - Still present for all candidates. All candidates may have to replace aircraft and engines through attrition.

The procurement and sustainment costs of the Eurofighter were still higher, as was the assessed risk as a percentage of the jets required.

Image
 
prebennorholm
Posts: 6644
Joined: Tue Mar 21, 2000 6:25 am

Re: Danish JSF plans in trouble

Sat Dec 09, 2017 1:37 am

Ozair wrote:
VSMUT wrote:
Latest news:
Much was made of how cheap the F-35 would supposedly be to operate back when the Danish decision was made. The estimate back then was 57 billion DKK over 30 years, and was promised to be 99% correct. The ministry of defence has now admitted that the actual costs will be much higher, possibly as much as 100 billion DKK for a 30 year period, an increase of roughly 75%.

http://nytkampfly.dk/archives/10498

That is an interesting evaluation. From the article this is what they compared against,

• Exchange rate between US Dollar and Danish kroner
• .....

Funny thing is that since we ordered the F-35 18 months ago the US dollar has dropped in value against Danish krone. From roughly DKK 6.65 per dollar to roughly 6.30. (Yeah, DKK has been stable against Euro since the Euro was invented).

So there we already saved some 5%, or about one billion DKK. :o

Those wildly fluctuating guestimates for the next 30 years are due to the fact that nobody knows how these weapons will be equipped in 10 or 15 years time. We can only see in the back mirror that combat aircraft lasting 30 years or more have always passed a number of expensive upgrades.

When our F-16A's were updated to F-16AM, then it cost an awful lot of money, in inflated figures a lot more than the original purchase cost. But we also got an entirely different and much more capable plane out of it. But it was done as a long lasting maintenance and update project over several years, and such projects don't attract political interest the same way.
Always keep your number of landings equal to your number of take-offs
 
VSMUT
Topic Author
Posts: 1350
Joined: Mon Aug 08, 2016 11:40 am

Re: Danish JSF plans in trouble

Sat Dec 09, 2017 2:26 pm

Nice try, but:

Ozair wrote:
• Exchange rate - Currency fluctuation would still have been present, although very minor given the values are calculated in Danish Kroner and not Euros.


The danish krone is pegged to the Euro. It doesn't fluctuate, it is a fixed constant.

Ozair wrote:
• Real growth in prices - Still present for all candidates. A fixed price acquisition cost may have been available but that doesn't cover long term sustainment.
• Payments for maintenance of Joint Strike Fighter by external supplier - Still present for all candidates. The Danes would still have the pay Boeing and Eurofighter for maintenance.


Except if those were included in the fixed price package...


Ozair wrote:
• Joint Strike Fighter's consumption of fuel - Still present for all candidates. Logic that all three consume fuel.


The SFC for the Typhoon and Super Hornet are well known. The F-35 is still under development, and could change a lot.

Ozair wrote:
• Economic impact of the risks of the Joint Strike Fighter - Still presents for all candidates. All three were offering industrial work. The difference is only one could garuentee that their airframe's primary custoemr would be operating the jet past 2060.


Both Boeing and Airbus offered 100% buy-back. Lockheed Martin offered nothing at all, and has so far not delivered anything either.

Ozair wrote:
The procurement and sustainment costs of the Eurofighter were still higher, as was the assessed risk as a percentage of the jets required.


And at this point, where it has been revealed that the entire survey you are referring to was more or less bogus and covered up significant points to paint the F-35 as the better choice, this claim seems pretty dubious. The report isn't even worth the value of the paper it is printed on any more.
 
Kiwirob
Posts: 10928
Joined: Mon Jun 13, 2005 2:16 pm

Re: Danish JSF plans in trouble

Sat Dec 09, 2017 6:11 pm

Dutchy wrote:
The Dutch Airforce also has a budgetary problem, financing the 37 F-35's. For the current budget, only 34 can be acquired. They said because of the Euro/Dollar, but isn't much of the work done in the Euro zone?


It doesn’t matter where the work is being done if the purchase price is in USD.
 
User avatar
Dutchy
Posts: 4065
Joined: Sat Nov 03, 2007 1:25 am

Re: Danish JSF plans in trouble

Sat Dec 09, 2017 6:11 pm

Kiwirob wrote:
Dutchy wrote:
The Dutch Airforce also has a budgetary problem, financing the 37 F-35's. For the current budget, only 34 can be acquired. They said because of the Euro/Dollar, but isn't much of the work done in the Euro zone?


It doesn’t matter where the work is being done if the purchase price is in USD.


Depends if the contract between LM and its Euro subsidiaries are in USD or do take the exchange rate in mind. If it is all done in USD then indeed, it doesn't mind, but that should mean that the Euro companies making more profit because of the exchange rate.
Many happy landings, greetings from The Netherlands!
 
Kiwirob
Posts: 10928
Joined: Mon Jun 13, 2005 2:16 pm

Re: Danish JSF plans in trouble

Sat Dec 09, 2017 6:19 pm

What’s other European companies got to do with the price for f-35’s going up due to the exchange rate? The answer is nothing.
 
User avatar
Dutchy
Posts: 4065
Joined: Sat Nov 03, 2007 1:25 am

Re: Danish JSF plans in trouble

Sat Dec 09, 2017 6:31 pm

Not that difficult, Rob.

If you buy something in the US in USD, but a large part of this product is produced in Europe in Euro's, do you think that buying this item should go more up (from a Euro perspective), compared to a product produced entirely in the US and thus in USD?
Many happy landings, greetings from The Netherlands!
 
Ozair
Posts: 1812
Joined: Mon Jan 31, 2005 8:38 am

Re: Danish JSF plans in trouble

Sat Dec 09, 2017 9:35 pm

VSMUT wrote:
The danish krone is pegged to the Euro. It doesn't fluctuate, it is a fixed constant.

Sure, I did say very minor but will accept that point.

VSMUT wrote:
Except if those were included in the fixed price package...

But they were not. There is no way that Eurofighter fixed the sustainment cost or maintenance fee for the 30 year operational timeframe. If that had been the case the Danes would have found zero risk in those aspects of the bid. Instead the Eurofighter had the highest element of risk of the proposals.


VSMUT wrote:
The SFC for the Typhoon and Super Hornet are well known. The F-35 is still under development, and could change a lot.

You need to research more about the program before you make false statements. The F135 engine development, from an SDD perspective is finished.
While the F-35 program is not expected to conclude system development and demonstration (SDD) flight testing until Oct. 31, 2017–a date the Joint Program Office says will likely need to be extended by a couple of months–for engine manufacturer Pratt & Whitney, it has been “pencils down” on the development phase of the F135 engine since mid summer.

“Our development program is over,” Clifford Stone, vice president of international programs and business development at Pratt & Whitney Military Engines, told Skies in a recent interview. “We completed SDD in July.”

https://www.skiesmag.com/news/pratt-whi ... tion-f135/

Even better, P&W already have an upgrade program in place that will be cost neutral and be available before the Danes acquire a single aircraft.

It would be cost neutral, so the upgraded JSF motor with Growth Option 1.0 would be the same price as the existing motor."

Pratt & Whitney recently completed performance tests of an early version of the system, called the fuel burn reduction demonstrator engine, which proved that the upgrade could improve thrust by up to 10 percent and reduce fuel consumption by up to 6 percent, he said.

https://www.defensenews.com/air/2017/05 ... 35-engine/


VSMUT wrote:
Both Boeing and Airbus offered 100% buy-back. Lockheed Martin offered nothing at all, and has so far not delivered anything either.

Again, you need to research before you make incorrect statements.

The Danish Business Authority monitors how Lockheed Martin, Pratt & Whitney and their sub suppliers co-operate with Danish industry within the framework of Denmark’s participation in the Joint Strike Fighter partnership.
Denmark and eight other countries are involved in the Joint Strike Fighter partnership concerning the development, production and sustainment of a new fighter jet, the F-35.

Within the JSF partnership, an agreement was entered into by the partner countries in 2007 whereby the industry in the partner countries gets the opportunity to participate in the development, production and sustainment of the F-35 on the principle of ‘best value’. The participating countries cannot oblige the supplier to industrial co-operation.

The decision to grant an exemption to the regulations on industrial co-operation was taken in 2007 on the basis of the wishes of Danish industry, and it was a non-negotiable demand for allowing Denmark – as well as the other partner countries – to participate in the JSF partnership’s production and sustainment phases. The granting of an exemption in Denmark was contingent on Denmark continuously receiving reports about the involvement of Danish companies in the JSF partnership.

The Danish Business Authority is responsible for monitoring Danish companies’ participation in the JSF partnership. Twice a year, Lockheed Martin and Pratt & Whitney meet with the Danish Business Authority and submit an updated report of activities with Danish companies relating to the JSF partnership. Based on the reports, the Danish Business Authority contacts the relevant Danish companies to have the information in the reports verified.

Through the most recent verification process, Danish companies have verified a total amount of USD 415.474.846 from Lockheed Martin and Pratt & Whitney.

36 % of the order volume was directly placed by Lockheed Martin, whereas 2 % was placed by Pratt & Whitney. The remaining 62 % are orders placed by Lockheed Martin’s subcontractors. Since Denmark entered into the development phase in 2002, a total of 15 Danish companies have received JSF orders from Lockheed Martin, Pratt & Whitney or subcontractors.

The Danish Business Authority may not disclose the reports from Lockheed Martin and Pratt & Whitney, as the reports contain sensitive commercial information about the companies, including information on specific contract orders, contract values and expected future contracts.

For information concerning the type selection of a new fighter jet, please refer to the Ministry of Defence.

https://danishbusinessauthority.dk/join ... ticipation

Again, the amount of industrial work available to Danish companies from the F-35 is significant. The fleet will grow to over 2000 jets and be in production until at least 2040 and in service until the 2060s. Neither Boeing or Eurofighter can offer that timeframe for their respective jets.


VSMUT wrote:
And at this point, where it has been revealed that the entire survey you are referring to was more or less bogus and covered up significant points to paint the F-35 as the better choice, this claim seems pretty dubious. The report isn't even worth the value of the paper it is printed on any more.

Well that is your claim but it is not based on factual evidence and the acquisition of the F-35 by Denmark continues on.
 
petertenthije
Posts: 3449
Joined: Tue Jul 10, 2001 10:00 pm

Re: Danish JSF plans in trouble

Sun Dec 10, 2017 3:00 am

Dutchy wrote:
Kiwirob wrote:
Dutchy wrote:
The Dutch Airforce also has a budgetary problem, financing the 37 F-35's. For the current budget, only 34 can be acquired. They said because of the Euro/Dollar, but isn't much of the work done in the Euro zone?


It doesn’t matter where the work is being done if the purchase price is in USD.


Depends if the contract between LM and its Euro subsidiaries are in USD or do take the exchange rate in mind. If it is all done in USD then indeed, it doesn't mind, but that should mean that the Euro companies making more profit because of the exchange rate.

It makes no difference for the RNLAF. They agreed a price in USD with LM.

If the dollar appreciates in value, then the supply chain will be cheaper for LM, but LM are not required to pass on the savings.
Likewise, if the euro appreciates in value, then the supply chain will be more expensive for LM, but LM are not allowed to pass on the extra costs.
The price has been set, barring some legal loopholes, the RNLAF will pay X amount of USD, no matter how much a USD is worth in EUR at that time.
Attamottamotta!
 
Kiwirob
Posts: 10928
Joined: Mon Jun 13, 2005 2:16 pm

Re: Danish JSF plans in trouble

Sun Dec 10, 2017 8:38 am

Dutchy wrote:
Not that difficult, Rob.

If you buy something in the US in USD, but a large part of this product is produced in Europe in Euro's, do you think that buying this item should go more up (from a Euro perspective), compared to a product produced entirely in the US and thus in USD?


The contract and purchase price are in USD, that’s all that counts.
 
User avatar
Dutchy
Posts: 4065
Joined: Sat Nov 03, 2007 1:25 am

Re: Danish JSF plans in trouble

Sun Dec 10, 2017 8:55 am

petertenthije wrote:
Dutchy wrote:
Kiwirob wrote:

It doesn’t matter where the work is being done if the purchase price is in USD.


Depends if the contract between LM and its Euro subsidiaries are in USD or do take the exchange rate in mind. If it is all done in USD then indeed, it doesn't mind, but that should mean that the Euro companies making more profit because of the exchange rate.

It makes no difference for the RNLAF. They agreed a price in USD with LM.

If the dollar appreciates in value, then the supply chain will be cheaper for LM, but LM are not required to pass on the savings.
Likewise, if the euro appreciates in value, then the supply chain will be more expensive for LM, but LM are not allowed to pass on the extra costs.
The price has been set, barring some legal loopholes, the RNLAF will pay X amount of USD, no matter how much a USD is worth in EUR at that time.


So the risk for that part is with LM, not the end user, thanks.
Many happy landings, greetings from The Netherlands!
 
Kiwirob
Posts: 10928
Joined: Mon Jun 13, 2005 2:16 pm

Re: Danish JSF plans in trouble

Sun Dec 10, 2017 3:51 pm

Dutchy wrote:
petertenthije wrote:
Dutchy wrote:

Depends if the contract between LM and its Euro subsidiaries are in USD or do take the exchange rate in mind. If it is all done in USD then indeed, it doesn't mind, but that should mean that the Euro companies making more profit because of the exchange rate.

It makes no difference for the RNLAF. They agreed a price in USD with LM.

If the dollar appreciates in value, then the supply chain will be cheaper for LM, but LM are not required to pass on the savings.
Likewise, if the euro appreciates in value, then the supply chain will be more expensive for LM, but LM are not allowed to pass on the extra costs.
The price has been set, barring some legal loopholes, the RNLAF will pay X amount of USD, no matter how much a USD is worth in EUR at that time.


So the risk for that part is with LM, not the end user, thanks.


Not really it all depends on their currency hedging, you can bet they are pretty good at it.
 
User avatar
Tugger
Posts: 7051
Joined: Tue Apr 18, 2006 8:38 am

Re: Danish JSF plans in trouble

Mon Dec 11, 2017 5:33 pm

Kiwirob wrote:
Not really it all depends on their currency hedging, you can bet they are pretty good at it.

I was just going to mention this. Most nations and major corporation hedge assiduously when they make a multi-billion dollar purchase commitment specifically to protect themselves. It isn't perfect (you can't hedge the whole thing) but it Denmark is no simpleton and is very capable on the world of international finance.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner
 
User avatar
Dutchy
Posts: 4065
Joined: Sat Nov 03, 2007 1:25 am

Re: Danish JSF plans in trouble

Mon Dec 11, 2017 5:54 pm

Tugger wrote:
Kiwirob wrote:
Not really it all depends on their currency hedging, you can bet they are pretty good at it.

I was just going to mention this. Most nations and major corporation hedge assiduously when they make a multi-billion dollar purchase commitment specifically to protect themselves. It isn't perfect (you can't hedge the whole thing) but it Denmark is no simpleton and is very capable on the world of international finance.

Tugg


Exactly, so this exchange rate seems a bogus argument, or the Denish government didn't do its homework. Or with governments and really large corporations, they just take the loss or a gain if the exchange rate fluctuates, simply cost too must to hatch, you have to pay someone (=banks) to do this, it isn't free. A bit like the Dutch police cars (and presumably all cars from the government) aren't insured, because the pool of cars is so large, there is no need to ensure them and just pay out all the claims which would otherwise go to premiums.
Many happy landings, greetings from The Netherlands!
 
prebennorholm
Posts: 6644
Joined: Tue Mar 21, 2000 6:25 am

Re: Danish JSF plans in trouble

Tue Dec 12, 2017 1:00 am

Tugger wrote:
Kiwirob wrote:
Not really it all depends on their currency hedging, you can bet they are pretty good at it.

I was just going to mention this. Most nations and major corporation hedge assiduously when they make a multi-billion dollar purchase commitment specifically to protect themselves. It isn't perfect (you can't hedge the whole thing) but it Denmark is no simpleton and is very capable on the world of international finance.
Tugg
The Danish state has never hedged one single penny, and will never do so.

Of course we can pay the price. And of course it makes some political noise that we buy those toys well before we can know the final price.

We can't even specify exactly how they are going to be equipped when delivered 2021 and forward. Maybe some weapon systems to be included hasn't even been fully developed yet. What spares stock is needed is an open question etc.? Financial conscious politicians often hate such cases, but such is reality.

Hedging, that is always good business for the banks involved. They make sure to win in the long run. The customers buying the hedging will therefore always be the losers in the long run. But it may safeguard financially weak private companies from going out of business when encountering excessive headwind.

The secretary of defense said in the parliament: "Hand me a good and failure proof crystal ball, then I will be happy to answer your questions".
Always keep your number of landings equal to your number of take-offs
 
Ozair
Posts: 1812
Joined: Mon Jan 31, 2005 8:38 am

Re: Danish JSF plans in trouble

Tue Dec 12, 2017 3:17 am

prebennorholm wrote:
Of course we can pay the price. And of course it makes some political noise that we buy those toys well before we can know the final price.

I guess the consolation in that statement is that Denmark know they will not pay more than any other partner nation in the year they buy as per the JSF agreement, irrespective of it being 100 aircraft or one.

prebennorholm wrote:
We can't even specify exactly how they are going to be equipped when delivered 2021 and forward. Maybe some weapon systems to be included hasn't even been fully developed yet.

To start with they will re-use all the weapons present on the F-16 bar the cannon ammunition, including AIM-9x, AMRAAM, GBU-31 and GBU-12. What 5th gen weapons arrive will probably depend on the next few years of tactics development and how the respective services see the use and advantages of the jet. Would be good to see Denmark sign for some SDB II as well.

prebennorholm wrote:
What spares stock is needed is an open question etc.? Financial conscious politicians often hate such cases, but such is reality.

That will already be known given Israel, Japan, Norway and the Netherlands are operating F-35 within their own countries and by the time Denmark receive the jet the spares situation will also have stabilized.
 
prebennorholm
Posts: 6644
Joined: Tue Mar 21, 2000 6:25 am

Re: Danish JSF plans in trouble

Wed Dec 13, 2017 1:10 am

Ozair wrote:
prebennorholm wrote:
We can't even specify exactly how they are going to be equipped when delivered 2021 and forward. Maybe some weapon systems to be included hasn't even been fully developed yet.

To start with they will re-use all the weapons present on the F-16 bar the cannon ammunition, including AIM-9x, AMRAAM, GBU-31 and GBU-12. What 5th gen weapons arrive will probably depend on the next few years of tactics development and how the respective services see the use and advantages of the jet. Would be good to see Denmark sign for some SDB II as well.

I agree, the AMRAAMs and GBUs and other such weapons will of course be carried over from the F-16.

But I was thinking as much about things like radar, jamming, IFF, ECM, and other such various electronic systems. When we get the last F-35A, then it may very well include expensive systems which are not anywhere near operational today. And consequently their pricetag is today pure guesswork. But in any case we have to be NATO compatible to make any meaning at all, so what we finally get will to some degree have to be dictated by other NATO F-35 operators.

When such upgrades or late changes are classified, which they often are, then there is only one name for them: Cost overrun.
Always keep your number of landings equal to your number of take-offs
 
Ozair
Posts: 1812
Joined: Mon Jan 31, 2005 8:38 am

Re: Danish JSF plans in trouble

Wed Dec 13, 2017 2:12 am

prebennorholm wrote:
But I was thinking as much about things like radar, jamming, IFF, ECM, and other such various electronic systems. When we get the last F-35A, then it may very well include expensive systems which are not anywhere near operational today. And consequently their pricetag is today pure guesswork. But in any case we have to be NATO compatible to make any meaning at all, so what we finally get will to some degree have to be dictated by other NATO F-35 operators.

I’m not sure what systems you are referring to? The F-35 comes equipped with a radar, EW jamming, IFF, ECM, radios etc as part of the basic package given it is all internal. The jet also has a towed decoy but I expect operating nations would have to acquire additional in the event of their use.

If we consider upgrades to these systems then yes that will likely have to be paid for but that is no different to any other jet that Denmark could acquire. The advantage though is any devs costs to upgrade systems can be shared across the community. In that case either of two things happen, the overall cost for upgrade is reduced or the amount of improvement within the upgrade is increased for the same price. Also, as a partner nation Denmark gets a seat at the table to vote on enhancements and their respective priority within Blk 4 and Blk 5.

Denmark also does not have to upgrade if they don’t want to. The difference with the F-35 is that the aircraft systems and architecture were intentionally built with upgrade in mind, so it is easier and typically cheaper to upgrade the jet compared to previous generations. As with the engine upgrade highlighted above, these upgrades often return savings in fuel burn or extended operational life.

prebennorholm wrote:
When such upgrades or late changes are classified, which they often are, then there is only one name for them: Cost overrun.

The F-35 program has run to budget and schedule since the re-baseline in 2011. Yes things went overboard before then but it is clearly under control now, both budgetary and schedule, and has been for 6 years.
 
prebennorholm
Posts: 6644
Joined: Tue Mar 21, 2000 6:25 am

Re: Danish JSF plans in trouble

Wed Dec 13, 2017 11:59 pm

Ozair wrote:
The F-35 comes equipped with a radar, EW jamming, IFF, ECM, radios etc as part of the basic package given it is all internal.

Yes, sure right. But we won't get the F-35 in 2021 and forward with top notch 2017 systems, but top notch 2021-and-forward systems. The defense secretary would love to know the price tag on those systems. His doesn't. Nobody knows yet.

Last time I visited a fighter maintenance shop, then they were busy replacing all wiring systems on the planes. When I asked what was wrong with the old cabling system, then I was told that nothing was wrong. But ever since the Wright Brothers flew first time, they had been upgrading and replacing black boxes constantly, and it would always be like that.

Sometimes they could accommodate new boxes with limited additions to existing cabling, but this time it was more relevant to replace it all, even if they spent endless hundreds of hours on producing every single cabling set.

They didn't show me the new boxes (and I didn't ask for it :talktothehand: ), only the various new structures in the avionics bays to hold the boxes. They expected that upgrade to be completed in just over two years, after which they sure expected to begin another upgrade program on the same planes.
Always keep your number of landings equal to your number of take-offs
 
prebennorholm
Posts: 6644
Joined: Tue Mar 21, 2000 6:25 am

Re: Danish JSF plans in trouble

Fri Dec 15, 2017 3:42 am

Deal was settled by Danish parliament today. Price estimated to DKK 16.4 billion or just over US$ 2.5 billion for the 27 planes.

DKK 650 million (US$ 100 million) has been granted for upgrades to the Skrydstrup AFB to be able to accommodate the F-35. That includes buying and removing houses which otherwise would be exposed to too much noise.

Total investment DKK 17.05 billion will be roughly 0.8% of BNP for one year. When spread over 4-5 years it will be between 10 and 15% of the total defense budget for those years. Hardly a big problem since we have quite recently finished investment in new heavy helicopters (AW-101), transport planes (C-130J) and fishery/environmental patrol planes (Challenger). Replacement of F-16 with F-35 is the only really expensive air force investment over the next couple of decades or so.

Total lifetime cost for 30 years 2021 to 2050 (including training, maintenance, fuel, spare parts, upgrades, weapons etc.) was estimated to DKK 57 billion = US$ 9 billion. But that's nothing but a hasty glance into a crystal ball.

All figures are "2017 money".
Always keep your number of landings equal to your number of take-offs
 
User avatar
Aesma
Posts: 9405
Joined: Sat Nov 14, 2009 6:14 am

Re: Danish JSF plans in trouble

Fri Dec 15, 2017 4:34 pm

Dutchy wrote:
Exactly, so this exchange rate seems a bogus argument, or the Denish government didn't do its homework. Or with governments and really large corporations, they just take the loss or a gain if the exchange rate fluctuates, simply cost too must to hatch, you have to pay someone (=banks) to do this, it isn't free. A bit like the Dutch police cars (and presumably all cars from the government) aren't insured, because the pool of cars is so large, there is no need to ensure them and just pay out all the claims which would otherwise go to premiums.


You can't hedge for the price of maintenance and spare parts in 15 or 20 years.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
User avatar
Dutchy
Posts: 4065
Joined: Sat Nov 03, 2007 1:25 am

Re: Danish JSF plans in trouble

Fri Dec 15, 2017 9:22 pm

Sure you can, but who wants to?
Many happy landings, greetings from The Netherlands!

Who is online

Users browsing this forum: No registered users and 14 guests

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos