Air force eyes resale value of Super Hornets even before deal is done
by Murray Brewster (feat. Dave Perry)
September 20, 2017
If Canada ever buys Boeing Super Hornet jet fighters, it would be better off with the two-seat variant because they would fetch a better price on the resale market, military planners told the commander of the air force earlier this year.
An internal defence department analysis, obtained by CBC News, also spells out clearly that the 18 warplanes Canada hoped to buy would not be kept once a permanent replacement is purchased for the existing fleet of CF-18s.
The Liberal government has been decidedly opaque on that point since announcing last year it was exploring a sole-source deal.
But the documents, dated Jan. 26, 2017, leave no doubt what would happen to the jets.
"Canada would be required to dispose of the Super Hornets once the permanent fighter replacement fleet was acquired for the RCAF," said the analysis. "Initial information suggest that the resale value of the two-seat FA-18F aircraft would be higher than that of the single-seat FA-18E model."
Past attempts to pin down Defence Minister Harjit Sajjan on the question of how long the air force would fly the Super Hornets was met with a vague response: "The interim fleet is there for the interim period."
Even though they would be more expensive to purchase, dual-seat Super Hornets would provide the air force "with greater flexibility," particularly in complex bombing missions, the documents said.
The entire Super Hornet plan is on shaky political ground because of the trade dispute between Boeing and Bombardier.
The documents, however, cast more doubt on the wisdom of the stopgap purchase, especially in light of last week's recommendation by the U.S. State Department.
The agency that oversees foreign military sales in Washington gave Canada the green light to buy both single and dual-seat Super Hornets and estimated the price tag for 18 fighters at $6.3 billion.
Critics have argued it is a lot of money to spend on jets that would be sold off after being flown for perhaps as little as a decade.
Defence analyst Dave Perry said he was surprised that resale value would be a consideration.
"We're not collecting used cars," he said. "This is just adding to the silliness of the enterprise."
Sajjan has insisted the jets are necessary because there is a "capability gap" in which the air force cannot meet both its Norad and NATO commitments simultaneously.
There is, of course, the larger political dimension.
The deal has been "under review" since Boeing launched its trade complaint against Quebec-based Bombardier.
Prime Minister Justin Trudeau came out swinging against the giant U.S. aircraft-maker on Monday, saying Canada "won't do business with a company trying to sue us."
Turning up the heat
At a news conference on Tuesday, he ratcheted up the political pressure, telling Canadian firms who sell parts to Boeing that they should focus their time and attention south of the border.
"I encourage people who work with Boeing across the country to tell the company the extent to which its actions against the Canadian aerospace industry is not in its interest and certainly not in the interest of Canadians," the prime minister said at a news conference in Ottawa.
Boeing has accused Bombardier of being subsidized and selling its CSeries passenger jets in the U.S. at a cut-rate price.
A U.S. trade regulator will release the results of its preliminary investigation next week, which could mean fines or tariffs against Bombardier.
Trudeau was asked whether he'd consider ditching the interim fighter proposal.
The dispute doesn't change the basic military considerations, he said.
"We have a capability gap," he said.
"We cannot fulfil our obligations towards both Norad and NATO at this point, and we need to fix that. Canadians expect us to do our part in defending North America and in our responsibilities towards NATO, and unfortunately, the extended mess that the previous government made around procurement of fighter jets has left us in a difficult position."
The government will "continue to look for options on an interim solution," Trudeau said.
Buying used Australian FA-18s (an older version of Boeing's jet fighter) is among the other options examined by air force planners —- something Perry said is among "the least dumb idea" among the options.