Why Has the Cost of Fixed-Wing Aircraft Risen?: A Macroscopic Examination of the Trends in U. S. Military Aircraft Costs over the Past Several Decades

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This report explores why, in recent decades, military fixed-wing aircraft costs have escalated beyond the rates of commonly used inflation indices, examining both economy-driven factors that the Services cannot control and customer-driven ones that they can. The authors found that this trend of cost increases is true for all types of aircraft patrol, cargo, trainer, bomber, attack, fighter, and electronic warfare.

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Product Details

  • ISBN-13: 9780833043122
  • Publisher: Rand Publishing
  • Publication date: 11/15/2008
  • Pages: 116
  • Product dimensions: 5.90 (w) x 8.90 (h) x 0.40 (d)

Meet the Author

Mark V. Arena (Ph.D., Physical Chemistry, Stanford University) is a physical scientist at RAND.

Obaid Younossi (B.S. Mechanical Engineering University of Pittsburgh, Pittsburgh, PA) is an engineer, Research Staff Management Division.

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Table of Contents

Preface iii

Figures xi

Tables xiii

Summary xv

Acknowledgments xix

Abbreviations xxi

Chapter 1 The Escalation of Aircraft Costs 1

Chapter 2 Data and Price Trends 5

Data Sources and Normalization 5

Sources of Data and Their Content 6

Technical and Schedule Databases 7

Data Limitations 8

Adjustments and Normalization 8

Final Dataset and Systems Represented 8

Measuring Cost Escalation 9

Trends 10

Summary 15

Chapter 3 Economy-Driven Factors 17

Distribution of Costs 17

Labor Rates 20

Material and Equipment 24

Fees and Profits 27

General and Administrative Costs 27

Material Overhead 28

Fees and Profits 29

Notional Aircraft Comparisons 30

Summary 31

Chapter 4 Customer-Driven Factors 33

Quantity Effects 33

Cost Improvement 34

Procurement Rate 36

Configuration Effects 39

Basic Technical Characteristics 44

Other Elements 46

Summary 47

Chapter 5 Pairwise Comparisons 49

Economy-Driven Factors 50

Customer-Driven Factors 51

Total Escalation 53

Chapter 6 Industry Views on Military Fixed-Wing Aircraft Cost Escalation 57

Military Fixed-Wing Aircraft Industry 57

Increased Military Utility 58

Stealth 58

Weight Reduction 59

Lean Manufacturing 61

Government Requirements 62

Berry Amendment and "Buy American" Legislation 62

OSHA and Environmental Regulations 63

Antitamper Requirements 64

International Trade in Arms Regulations 64

Summary 65

Chapter 7 Options for the Air Force and the Navy to Reduce Fixed-Wing Aircraft Costs 67

Make Fixed-Wing Aircraft Procurement More Stable and Predictable 68

Stabilize Project Manageement and Design 70

Rethink Competition Within the Industrial Base 70

EncourageInternational Competition and Participation 72

Improve the Process of Formulating Requirements and Capabilities 72

Focus Attention on Upgrades and Commercial Derivatives 73

Increase the Use of Evolutionary Acquisition Principles 74

Lessons Learned from the F-22A and F/A-18E/F Development Programs 75

Summary 76

Chapter 8 Conclusion 79


A Aircraft Included in the Analysis 83

B Survey of Industry 89

Bibliography 91

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