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20 June 2016

SECNAV warns cost of F/A-18E/F could rise

Speaking in Germany on 19 June, US Secretary of the US Navy (USN) Ray Mabus warned that unless the US government approves sales to allies, the cost of new Boeing F/A-18E/F Super Hornets for the USN could rise.

Mabus admits to being frustrated by delays in approval of foreign sales and fears the USN may face a cost penalty as a result. The White House has been delaying approval of an estimated $3 billion sale of 28 aircraft to Kuwait for almost a year.

Boeing has stated it needs to be producing two aircraft for month to ensure economical production and current expectations are that Congress will approve only 16 F/A-18s for the USN Fiscal Year 2017 request. Lack of approval of the Kuwaiti order will leave a gap that may increase unit costs for the USN. The Navy is expected to request a larger number for Fiscal 2018, which may persuade Boeing to maintain current price levels, though this is currently far from certain. The company is understood to be spending “hundreds of millions of dollars” in procuring long lead time materials such as titanium to cater for expected orders.

Welcoming Mabus’ remarks, a Boeing spokesperson said the company “agrees that a Kuwaiti order is an important element in continuing a production rate of two per month to keep prices optimal.”