The Air Force’s budget request for FY 2020 is the second highest it has ever been, even when adjusted for inflation. Yet the size of the Air Force as measured by the number of aircraft in the inventory and the number of active duty military and civilian personnel is near the smallest it has ever been. So why is the Air Force spending more for a smaller force?
Over the past two decades, the Air Force’s budget grew by more than 60 percent, adjusting for inflation, while the number of aircraft declined by 13 percent. One reason people often cite for this apparent discrepancy is the increasing capabilities of modern aircraft. The theory goes that while these aircraft are more expensive to acquire, operate, and maintain, it takes fewer of them to deliver the same combat capability as older aircraft. This is certainly true in some instances, but it does not fully explain why the Air Force’s costs have been growing while the fleet size has been shrinking. Three quarters of the aircraft in the inventory today are the same aircraft that were in the inventory twenty years ago. Moreover, analysis of aircraft total ownership costs and flying hour costs do not clearly correlate with aircraft age. The operating costs of both new and old aircraft are growing.
What the data shows is that the total ownership cost of an aircraft is inversely correlated with the number of aircraft of that type in the inventory. In other words, aircraft that are maintained in smaller numbers tend to have higher operating costs per airframe. The reason for this is simple: a significant part of the operating costs for a given type of aircraft are fixed costs that do not vary with the number of aircraft in the fleet or how many hours they fly. Fixed costs include things like the costs of supporting aircraft-specific maintenance lines, aircrew training, and maintainer training. For small fleets of aircraft, these fixed costs tend to make up a larger share of overall costs and are spread across a smaller number of aircraft, which makes these aircraft more expensive per airframe to keep in the inventory. Small fleets of aircraft are eroding the purchasing power of the Air Force and limiting its ability to grow or even sustain the size of its current force.
This is a problem that has been gradually building over time. In the post-Cold War drawdown, the Air Force downsized primarily by making partial fleet reductions. For example, it cut the number of A-10s by 58 percent, B-1s by 37 percent, F-15s by 50 percent, and F-16s by 48 percent. While some aircraft types were eliminated completely, such as the F-117, C-141, and T-37, in many cases the Air Force merely reduced the number of aircraft of a given type.
As shown in the figure below, the number of unique aircraft types in the fleet has remained near the level it was at the peak of the Cold War while the total inventory has declined by nearly half. The result is smaller fleet sizes. In FY 1986, for example, the average fleet size was 160 aircraft per type. Today the average fleet size is 97 aircraft per type, and 12 percent of the inventory is in aircraft types that have less than 60 aircraft each.
Small fleet sizes and the high fixed costs of maintaining unique aircraft types is part of the reason the Air Force’s average operation and maintenance cost per plane grew by 78 percent in real terms over the past twenty years. Higher operating costs forced the Air Force to cut the aircraft inventory in the 2000s—even while its budget was growing—to protect its highest priority modernization programs. But the way the Air Force made reductions is part of the reason operating costs are so high. The full savings from retiring aircraft—particularly the fixed costs associated with unique aircraft types—cannot be realized unless entire fleets are eliminated. For example, the annual savings from cutting half of the A-10 fleet is roughly $300 million, whereas the annual savings from cutting all 298 A-10s is more than $1.7 billion.
To break out of this cycle, the Air Force should systematically review the 38 different aircraft types it currently maintains in quantities of less than 60 each and identify which fleets can potentially be eliminated. Wherever possible, it should try to eliminate single mission aircraft by integrating their capabilities with other multi-mission platforms or by finding innovative alternatives. For example, the Air Force could lease special purpose aircraft, like business jets used to ferry senior leaders, or contract for aircraft services instead of owning specialized fleets of aircraft for these missions.
However, it is not always possible or strategically prudent to eliminate certain small fleets of aircraft because it could create critical gaps in capabilities. The B-2 bomber is a perfect example of this because the Air Force only has 20 of these aircraft, and there is no other long-range penetrating strike aircraft in the inventory. It would be foolish to retire the B-2, especially before the new B-21 bomber is fielded in significant numbers.
The Air Force should also be mindful to avoid creating more small fleets in the future. The current “Digital Century Series” approach for the Next Generation Air Dominance (NGAD) fighter could potentially fall into this trap if the service buys as few as 72 aircraft of a given type before moving on to a different design. Moreover, new plans to retire aircraft could follow the same pattern as in the past where large aircraft fleets are gradually whittled down to small fleets. The Air Force should avoid making partial fleet reductions wherever possible because the meager savings are not likely to be worth the operational impact.
Keeping small fleets of aircraft in the inventory is a bad idea for the Air Force. Eliminating small fleets should be a priority to help arrest the growth in operation and sustainment costs that is eating the Air Force’s budget from within and limiting its ability to grow and modernize. And as it eliminates existing small fleets, it should be careful not to create new ones that perpetuate the problem.
(Photo Credit: Air Force Research Lab, “Air Superiority 2030”)