In an exclusive June 2006 interview, Israeli Air Force (IAF) chief procurement officer Brigadier-General Ze’ev Snir told Israel’s Globes publication that the F-35 Joint Strike Fighter was a key part of their IAF recapitalization plans, and that Israel intends to buy over 100 of the fighters to replace their F-16s over time. A 100-plane deal would have cost at least $5 billion under Israel’s original estimates, and would involve the F-35A conventional take-off Air Force version. Snir added that:

“The IAF would be happy to equip itself with 24 F-22s but the problem at this time is the US refusal to sell the plane, and its $200 million price tag.”

Unfortunately, Israel’s September 2008 request for its first 75 F-35s would end up costing them an estimated $15 billion – or about $200 million per plane. All in return for a fighter with poorer air-to-air performance than the F-22, and less stealth. The necessary contract must deal with that sticker shock, and with issues like the incorporation of Israeli technologies, before it can be signed. If not, there’s a 3rd contender waiting in the wings, but the Jerusalem Post reports that Israel recently took a big step toward buying the aircraft…

Snir’s comments aside, Israel has pressed the USA for F-22EX aircraft since 2005, in order to maintain the IAF’s traditional requirement of regional air superiority. The September 2008 request for F-35s appeared to sideline the F-22 option, but Israel’s F-15 Eagles will also require replacement in the coming years, and recent developments indicate that the F-22 option is being revived in the wake of F-35 sticker shock and concerns about F-35 delivery dates.

Access to the F-35’s software source code remains a live issue for the Israelis, as it has been with the Australians [PDF format], British, and others. That access is necessary for countries that want to upgrade the aircraft’s computers, and/or integrate new weapons, communications, or electronic warfare systems. Israeli planes generally undergo heavy modifications to incorporate Israeli electronics and weapons systems, and the US has allowed the Israelis access to the F-15 and F-16’s software. In June 2006, Snir said that he is confident the F-35A’s computers will not be an issue. He reiterated that there was:

”...no dispute with the US that IAF F-35s would include Israeli communications and electronic warfare technologies and missiles developed by Rafael Armament Development Authority Ltd.”

Israel will certainly seek to ensure that items like its communications systems, LITENING surveillance and targeting pod technology, ECM and defensive electronics, Python short-range missiles, and other weapons will be part of its initial F-35A buy – or at the very least, slotted into the overall program’s formal integration plans by a reasonable date.

Those possibilities are now in question, due to comments by the F-35’s program manager. Israel did not expect that, nor did they expect the price increase: from about $80 million per plane in current dollars to more than $200 million.

As was the case with the proposed LCS-I frigate buy from Lockheed Martin, negotiations and industrial arrangements along those lines will be very important to Israel’s final decision.

Lockheed Martin, meanwhile, is trying to ramp up orders for the F-35 quickly, even though the aircraft are expected to remain in testing until 2014. A large order book would allow the firm to offer early buyers much lower prices for each plane, using dollar averaging over a substantial initial batch instead of charging $130 million for early production aircraft and $70 million or so for the same plane 3 years later.

That dynamic is standard for military aircraft of all types, but the F-35 is about 5-7 years late versus the market ideal. Potential customers with air fleets that are reaching their expiry dates are reluctant to pay those early production costs, and if enough of them defect, the F-35 program as a whole could find itself in trouble. Hence the F-35 program’s interest in a substantial early order from Israel.

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