Canada News

F-35 One, Super Hornet Zero In Boeing’s Rift With Canada

Aviation Week // December 06, 2017

Lockheed Martin’s F-35 appears to have emerged the real winner from Boeing’s rift with Canada over Bombardier’s C Series passenger jetliner.

Canada’s liberal government has reportedly decided to scrap its planned $5.2 billion purchase of new F/A-18 E/F Super Hornets as an interim step to replacing its aging fleet of older-model Hornets. Instead, the Royal Canadian Air Force would buy earlier-generation Hornets from Australia as a short-term solution.

The decision, if confirmed, is seen as retaliation for Boeing and the U.S. government’s effort to penalize Canadian company Bombardier for allegedly dumping the C Series jetliner into the U.S. market at improperly low prices. Boeing filed an anti-dumping suit with the U.S. Commerce Department and the International Trade Commission (ITC) in April, saying Bombardier was unfairly subsidized by the Canadian government.

Ottawa has not yet confirmed reports that the Canadian government is backing out of the Super Hornet deal. Defense Minister Harjit Sajjan told reporters Dec. 5: “We are going to fill that interim capability gap. I look forward to making the announcement at the appropriate time.”

Losing the Canadian order would undeniably be a blow for Boeing’s fighter business. The company stands to lose not just the 18 new Super Hornets Ottawa planned to buy initially, but the chance to capture all 65 new fighters the Royal Canadian Air Force (RCAF) needs to recapitalize its fighter force.

Even worse, the dispute could drive the RCAF straight into competitor Lockheed Martin’s lap.

For a relatively small air force like Canada’s, it makes little sense to operate two types of aircraft, virtually guaranteeing the first 18 Super Hornets would have been followed by 47 more, argues Richard Aboulafia, an analyst with the Teal Group.

“Having a unique, 18-aircraft squadron just doesn’t make a lot of economic or military sense,” Aboulafia says. “Most likely they would’ve said, ‘Hey, we would save billions if we simply buy 47 more—that takes care of our fighter requirement for the next three decades.’”

Buying the Australian aircraft, which are almost identical in terms of age and capability to Canada’s current fleet, is at most a five-year Band-Aid for the aging fighter force, Aboulafia says.

If Canada scraps the Super Hornet deal and pursues a competition for a next-generation fighter in the next five years, Lockheed’s F-35 will almost inevitably emerge victorious, analysts agree.