Background and context

1. In successive Defence White Papers since 1976, Australia has outlined its defence strategy, which includes the control of the air and sea approaches to Australia. In this context, the Defence White Paper 2009 stated:

Our military strategy is crucially dependent on our ability to conduct joint operations in the approaches to Australia—especially those necessary to achieve and maintain air superiority and sea control in places of our choosing. Our military strategic aim in establishing and maintaining sea and air control is to enable the manoeuvre and employment of joint ADF [Australian Defence Force] elements in our primary operational environment, and particularly in the maritime and littoral approaches to the continent.¹

2. This audit examines the upgrade and sustainment of the Royal Australian Air Force’s (RAAF’s) fleet of 71 F/A-18A/B Hornet aircraft and the sustainment of 24 F/A-18F Super Hornet aircraft. These aircraft form the basis of the RAAF’s air combat and airborne ground-attack capability, and are to be replaced by F-35 Lightning II aircraft to be acquired from the United States Department of Defense by the Australian Department of Defence’s (Defence’s) AIR 6000 New Air Combat Capability project.² The F-35 acquisition arrangements, and progress achieved by the F-35 aircraft development and production phases, are the subject of a companion audit, ANAO Audit Report No.6 2012–13, Management of Australia’s Air Combat Capability—F-35A Joint Strike Fighter Acquisition, 27 September 2012.

3. At the time the Defence White Paper 2009 was developed, the RAAF’s air combat capability consisted of a fleet of 21 F-111C fighter-bomber aircraft and 71 F/A-18A/B Hornet aircraft. At the same time, the acquisition process to replace the F-111 fleet with 24 F/A-18F Super Hornets was underway.

4. The RAAF’s 71 F/A-18A/B Hornet aircraft are assigned to three operational squadrons and a training squadron.³ The Hornets entered service during the period 1985–90, and were originally planned to be withdrawn from service in 2010–15. However, Government decisions made in 2006 and 2009 extended the withdrawal period to 2017–20, and in May 2012 the need for a possible further extension arose, because of the Government’s decision to better align the delivery of Australia’s F-35A aircraft with the US Department of Defense’s F-35 production and acquisition schedule.⁴ Consequently, the precise timing of the F/A-18A/B withdrawal from service is dependent upon the delivery of the F-35A aircraft under schedules that are yet to be finalised.

5. At the time of the audit, the Hornet aircraft were nearing the completion of a two-decade series of systems and weapons upgrades and airframe structural refurbishments, on which some $3.678 billion (then-year dollars) will have been spent by 2015. The structural refurbishments will remain ongoing, as these aircraft are in the latter stages of their service life, and so require steadily increasing structural maintenance. By July 2012 the Hornet fleet had accumulated up to 27 years of operational service, including over 306 000 flying hours.

6. The RAAF’s 24 F/A-18F Super Hornet aircraft were acquired in 2010, and are operated in two squadrons.⁵ These aircraft replaced the RAAF’s 21 F-111 strike/reconnaissance aircraft, which were withdrawn from service in 2010.⁶ Currently, the Planned Withdrawal Date for the Super Hornets is 2025.

7. The two Hornet fleets make a significant contribution to Australian Defence Force capability, and as shown in Table S 1, successive Governments have invested heavily in acquiring, upgrading and sustaining these fleets, and significant amounts remain in forward estimates for fleet sustainment.

Table S 1 Hornet and Super Hornet fleets’ capability expenditure and forward estimates to 2021

Source: ANAO analysis of Department of Defence data.

Note: This table aims to be indicative of expenditure on the Hornet and Super Hornet fleets, rather than providing complete life-cycle costing; for example, it does not cover the early sustainment of the Hornet fleet. These amounts have not been adjusted for inflation.

Audit objectives and scope

8. The audit objective was to assess the upgrade and sustainment of the F/A 18A/B Hornet fleet, and the sustainment of the newly acquired F/A-18F Super Hornet fleet.

9. The ANAO commenced the audit in September 2011. Audit fieldwork was conducted from October 2011 to June 2012, in Melbourne at the Australian Defence Force’s (ADF’s) Directorate General Technical Airworthiness (DGTA) and the Defence Science and Technology Organisation (DSTO), and at the Defence Materiel Organisation’s (DMO’s) Tactical Fighter Systems Program Office (SPO) in Williamtown NSW and Amberley QLD. Tactical Fighter SPO is the organisation responsible for the day-to-day management of the RAAF’s F/A-18 Hornet and Super Hornet upgrades and sustainment.

10. In March 2012, the ANAO conducted interviews and collected documents on F/A-18 Hornet sustainment from US Department of Defense organisations located in Maryland, USA.

11. The audit examined:

• the sustainment aspects of the F/A-18A/B Hornet and F/A-18F Super Hornet fleets, including the achievement of specified operational availability; and
• the structural-refurbishment arrangements that provide a level of assurance that the F/A-18A/B Hornet aircraft will remain serviceable until their current Planned Withdrawal Date of 2020.

Overall conclusion

12. The RAAF F/A-18A/B Hornet air combat fleet is now in a period of transition similar to the transition from the Canberra bomber fleet to the F-111 fleet in the early 1970s, or from the Mirage fighter fleet to the Hornet fleet in the mid-1980s. The Hornet fleet has already been in operational service for up to 27 years, while the F-35A JSF aircraft, which is to eventually replace both the F/A-18A/B Hornet and F/A-18F Super Hornet fleets, is not currently expected to enter Full-Rate Production until 2019, by which time the oldest RAAF F/A-18 would have been in service for 34 years. Assessing the capability upgrade and sustainment status of both F/A-18 fleets is therefore fundamental to understanding the risks of an air combat capability gap occurring between the withdrawal from service of Australia’s F/A-18A/B fleet and the entry into service with the RAAF of the F-35s. Accordingly, this audit focused on that key issue.

13. This audit report draws attention to the risks inherent in the management of aged combat aircraft. These risks are wide-ranging and require ongoing, prudent management if the Tactical Fighter SPO and the RAAF’s Air Combat Group (ACG) are to ensure that the F/A-18A/B Hornet fleet remains capable of satisfying approved operational commitments, while it undergoes aircraft and weapons systems upgrades, airframe structural refurbishments, periodic Deeper Maintenance and Operational (flight-line) Maintenance.

14. Since 1995, there has been an extensive program of RAAF F/A-18A/B aircraft and weapon-system upgrade projects that have budgets totalling $3.245 billion. By May 2012, expenditure on these projects totalled $2.784 billion, and as a result, the RAAF’s F/A-18A/B aircraft are now significantly more capable than they were when introduced into service between 1985 and 1990.

15. These upgrades have been undertaken by firms under contract to Defence, and have progressed within an effective system of technical-airworthiness regulation, which has been established and managed by the RAAF and the ADF’s Directorate General Technical Airworthiness since 1993. The regulations encompass the release into operational service of new and modified aircraft, as well as the maintenance of ADF aircraft by RAAF, DMO and contractor personnel.

16. In recent years, Tactical Fighter SPO and the ACG have implemented a range of initiatives designed to ensure that the Hornet fleet can meet its operational requirements out to its Planned Withdrawal Date, which at the time of the audit was 2020.⁷ Defence records indicate that, while F/A-18A/B operational availability and logistics support satisfy DMO’s agreement with the RAAF, this is becoming increasingly difficult to achieve, because significant aged-aircraft issues are resulting in maintenance durations and costs becoming less predictable. Annual spending to sustain the Hornet fleet has averaged $118 million since 2000–01, but is trending towards $170 million per annum over the next several years. The cost of airframe corrosion-related repairs has also increased significantly, from $721 000 in 2007 to $1.367 million as estimated in 2011.

17. The F/A-18A/B Hornet was designed for a safe life of 6000 airframe hours under specified flight profiles. Defence data indicates that, at the current rate of effort of 13 000 airframe hours per year for the fleet (reducing to 12 000 hours from 2013–14), the Hornet fleet as a whole will not exceed 6000 flying hours for each aircraft until after the current Planned Withdrawal Date of 2020. That said, all but nine aircraft have experienced structural fatigue above that expected for the airframe hours flown, leading the ACG to take steps to conserve the remaining fatigue life of its F/A-18A/Bs to ensure they remain operable up to the safe life of 6000 airframe hours.

18. The most recent additions to the RAAF’s air combat capability are the 24 Super Hornets that were progressively delivered to RAAF Base Amberley, near Brisbane, between March 2010 and October 2011. In December 2010 the Super Hornet fleet achieved the Initial Operational Capability milestone, a week after the retirement of the RAAF’s F-111 fleet. The Super Hornet acquisition and its in-service support are largely based on US Government Foreign Military Sales arrangements that are designed to maximise commonality with US Navy F/A-18F sustainment arrangements. The RAAF’s F/A-18F Operational Maintenance squadrons are therefore organised as ‘pseudo’ deployed US Navy Super Hornet squadrons, drawing assistance from the supplier/repair-vendor network used by the US Navy.

19. At the time of the audit, the Australian Super Hornet sustainment arrangements were in their formative stage, and adjustments to maintenance policy and support arrangements to achieve better alignment with the US Navy’s arrangements were ongoing. Tactical Fighter SPO statistics indicated that the Super Hornet support system was steadily improving, but required further improvement. Tactical Fighter SPO and its Super Hornet maintenance contractor are working with the US Navy to achieve improvements ahead of the Super Hornets’ Final Operational Capability milestone, which is scheduled for December 2012.

20. The ANAO found that Defence has implemented sound managerial control over the upgrade and sustainment of its F/A-18 Hornet and Super Hornet fleets. Management statistics indicate that both fleets are meeting their operational requirements, within the context of a complex mix of factors including:

• Defence funding priorities, which determine the size of each aircraft fleet, and the extent of its in-service support;
• Deeper Maintenance capacity, which is determined by the size of the skilled workforce in industry. This dictates the completion rates of aircraft Deeper Maintenance and capability upgrades;
• Operational Maintenance capacity, which is determined by the size of the skilled workforce in Air Force. This dictates the completion rates of aircraft Operational Maintenance, and Deeper Maintenance routines carried out by RAAF operational-maintenance   personnel;
• capability-upgrade requirements, which are determined by the need to maintain control of the air and sea approaches to Australia. These dictate the frequency and extent of aircraft capability upgrades; and
• the extensive maintenance demands of advanced combat aircraft, which increase as aircraft near their airframe safe-life hours and structural-fatigue margins.

21. The key risks to the F/A-18 fleets’ fulfilment of their operational requirements until their replacement by the F-35A Lightning II (Joint Strike Fighter) revolve around Defence’s ability to maintain the present levels of Hornet sustainment and structural-integrity management. Defence data indicates that this will require steadily increasing financial investment, with F/A-18 Hornet sustainment costs estimated by Defence to peak at $214 million per year in 2018–19. By 2011, Hornet Deeper Maintenance service costs had risen 73 per cent, from $750 000 to $1.3 million per aircraft, over the previous few years. This reflects the effort needed to keep an aged and complex fleet airworthy and operational. Super Hornet sustainment costs are estimated by Defence to peak at $180 million in 2017–18, as these aircraft are expected to be withdrawn from service before costly aged-aircraft maintenance or structural-fatigue-related maintenance is required. These Defence sustainment estimates are based on the F/A-18 Hornet and F/A-18 Super Hornet Planned Withdrawal Dates of 2020 and 2025 respectively.

Overall summary

22. As indicated in paragraph 8, the audit objective was to assess the upgrade and sustainment of the F/A-18A/B Hornet fleet, and the sustainment of the newly acquired F/A 18F Super Hornet fleet. Defence’s management approach to the F/A-18 fleets has been effective thus far in identifying, in a variety of dimensions, the risks to their continued delivery of the required capability until their current Planned Withdrawal Dates. Defence has also been active in putting in place mitigation measures for these risks. However, the report outlines the significant risks that will require close management by Defence in the final stages of sustainment of the F/A-18A/B fleet in particular, when airframe hours flown and fatigue-life expended will be greatest.

23. These risks include:

• the increasing emergence of airframe corrosion and fatigue issues which make maintenance of the F/A-18A/B fleet more difficult and more expensive;
• the need to closely manage annual flying hours, given the approaching safe-life limits for the F/A-18A/B fleet (6000 hours for the airframe) and the potential requirement for an expansion of the safety-by-inspection regime to include airframe structures that are increasingly susceptible to wear or corrosion-initiated fatigue-cracking;
• the need to manage for a moderate reduction in the rate at which F/A-18A/B aircraft are accumulating structural fatigue to avoid their fatigue life being expended before they reach their safe life of 6000 airframe hours, given that most of the aircraft in the Hornet fleet have exceeded an optimum amount of accumulated structural fatigue according to their airframe hours flown; and
• the likelihood that the Planned Withdrawal Date for the F/A-18A/Bs will be extended as a result of the US decision to move the F-35 Full-Rate Production decision out by three years to 2019, and the Australian Government’s consequent May 2012 Budget decisions to delay the acquisition schedule for the F-35 aircraft.⁸ Extending the F/A 18A/B fleet’s Planned Withdrawal Date beyond 2020 may well require the fleet to undergo an expanded, and hence more costly, safety-by-inspection regime, structural modifications program and capability upgrades.

24. At the time of the preparation of this report, the Planned Withdrawal Date for the F/A-18A/B fleet was 2020. Following US and Australian Government decisions that have delayed earlier F-35A delivery intentions, the ANAO asked Defence for advice on its consequent contingency planning. Defence advised that it will be presenting options to the Government later this year on managing the air combat capability, including a limited extension of the Planned Withdrawal Date for the F/A-18A/Bs, as the RAAF transitions from the current fleet to a predominantly F-35A fleet.⁹ Defence indicated that this would include strategies to reduce the risks associated with the likely extension of the F/A-18A/B fleet’s operational life, and to minimise risks associated with progressing to the F-35A’s Initial Operational Capability.

25. The ANAO has not made any formal recommendations for administrative improvements in Defence’s management of the ADF’s air combat capability in this audit report (or in its companion report, Audit Report No.6 2012–13, Management of Australia’s Air Combat Capability—F-35A Joint Strike Fighter Acquisition). This is because, in the context of this complex transition in capability from the F/A-18 fleets, which includes the increasingly aged fleet of F/A-18A/Bs, to a future capability based on a next-generation multi-role aircraft being developed and produced by another nation, the approach by successive Australian Governments and the Defence organisation to both the upgrade and sustainment of the F/A-18A/B Hornet fleet and the acquisition and sustainment of the F/A-18F Super Hornet fleet has been measured, and based on appropriate information and planning.

26. Nonetheless, achieving the planned transition to an F-35-based air combat capability in the required timeframe, such that a capability gap does not arise between the withdrawal from service of the F/A-18A/B fleet and the achievement of full operational capability for the F-35, remains challenging. As indicated in paragraph 24, following US and Australian Government decisions that have delayed earlier F-35A delivery intentions, the F/A-18A/B fleet’s operational life is likely to be extended beyond the current Planned Withdrawal Date of 2020. Defence financial data indicates that the achievement of such an extension beyond 2020 will involve additional costs and will require detailed planning and close management by Defence. Defence’s capacity to accommodate any further delays in the production and/or acquisition of F-35s through a further extension to the life of the F/A-18A/B fleet, beyond the limited extension currently being considered, has limits, is likely to be costly, and has implications for capability. That said, decisions in relation to capability for the ADF, including Australia’s acquisition of F-35As, properly rest with the Australian Government, informed by advice from Defence.

Key findings by chapter

Chapter 2—F/A-18A/B Hornet fleet capability upgrades

27. The RAAF’s fleet of F/A-18A/B Hornet combat aircraft, delivered in the late 1980s, could not be expected to retain its original relative capability over three decades without significant weapons and systems upgrades. The Hornet fleet has therefore received upgrades of both its weapons and mission systems since the mid-1990s. These upgrades were intended to maintain the fleet’s effectiveness until a replacement was available that could provide a ‘quantum leap’ in capability.

28. The RAAF uses two engineering processes to manage the implementation of aircraft upgrades: Design Acceptance ensures that upgrades are technically airworthy, and is followed by Service Release, which verifies that RAAF units are ready to conduct operations with the new capability. Both of these processes are overseen by independent organisations within the RAAF: the Director General Technical Airworthiness (DGTA) oversees Design Acceptance, while the ADF’s Airworthiness Coordination and Policy Agency (ACPA-ADF) establishes Airworthiness Boards to oversee the annual Service Release for each ADF platform.

29. Once the Design Acceptance process has verified that a new capability can operate safely, the process concludes with the issue of an Australian Military Type Certificate or a Supplemental Type Certificate, stating that the modified weapon or aircraft meets technical-airworthiness standards. This is the military equivalent of the airworthiness certification of civilian aircraft by the Civil Aviation Standards Authority. The annual ACPA Airworthiness Board verifies that all the systems are in place for a fleet’s safe operation, and makes Service Release recommendations to the Chief of Air Force in his role as the ADF Airworthiness Authority. These engineering processes provide a sound basis for concluding that the RAAF has in place robust systems for the verification and management of its fighter aircraft and their upgraded weapons and systems.

30. The new weapons capabilities acquired for the Hornet fleet under the upgrade program include new short-range and medium-range air-to-air missiles, precision-bombing capability, and long-range cruise missiles for ground-strike operations, specifically:

• the AIM-132A Advanced Short Range Air-to-Air Missile (ASRAAM);
• the AIM-120B and AIM-120C5 Advanced Medium Range Air-to-Air Missile (AMRAAM);
• the Joint Direct Attack Munition (JDAM) air-to-ground bomb-guidance system; and
• the AGM-158A Joint Air-to-Surface Standoff Missile (JASSM).  

31. The aircraft themselves have received significant mission-system upgrades, including:

• upgrades of voice communications, the Identification Friend-or-Foe (IFF) system, and the inertial navigation system, as well as software for the radar-warning receivers, radars and new operational software;
• new fire-control radar, and electronic-protection techniques for the radar;
• a LINK 16 secure data link, an upgraded counter-measures dispenser, colour displays, an upgraded digital moving-map system, the Joint Mission Planning System, and a helmet-mounted cueing system;
• replacement of the radar-warning receiver, supplementation of the counter-measures dispenser and of jammer capability, and enhancement of the aircraft’s data-recording capability;
• an upgraded target-designation system;
• a GPS protection system; and
• a Variable Message Format data system.

32. The RAAF has also received updated flight-training simulators that take account of the upgrades to the aircraft and weapons.

33. The ANAO has established that these upgrades of Hornet weapons and systems have been introduced into service under the RAAF’s Design Acceptance and Service Release processes, which provide a rigorous systems-engineering framework that is required to underpin adequate levels of assurance that new systems will work safely and effectively.

34. The upgrade of all 71 RAAF F/A-18A/B Hornet aircraft is due for completion by 2015, at a total cost of $3.245 billion. Together with the fleet’s original acquisition cost of $4.44 billion, the total acquisition cost of the F/A-18A/B Hornet fleet amounts to some $7.685 billion over the period 1985–2015, covering the aircraft, aircraft upgrades and weapons upgrades.

Chapter 3—F/A-18A/B Hornet fleet sustainment

35. Once an aircraft’s airworthiness and weapons are assured, it becomes the task of an integrated logistic support system to make available the number of aircraft specified by the RAAF’s operational requirements. Hornet fleet integrated logistic support is managed by DMO’s Tactical Fighter SPO, with maintenance and repair activities carried out by Air Combat Group’s squadron maintenance personnel, as well as by BAE Systems Australia and Boeing Defence Australia.

36. Two key measures of the outcomes enabled by the logistics system are the number of hours flown by the Hornet fleet and the number of aircraft made available for operational purposes. Defence records show that the number of flying hours increased during 2009–10 and 2010–11, exceeding the hours achieved in the early 1990s. Flying hours were affected during 2009–10 and 2010–11 by aged-aircraft issues and Hornet upgrades, as well as some structural refurbishments. In 2011–12, the authorised flying hours were not achieved, largely due to a shortfall in the ratio of experienced pilots to junior pilots.

37. At present, Tactical Fighter SPO continues to make available to the RAAF the number of operational aircraft required by the Chief of Air Force, and this performance measure has been holding steady in recent years at a level above that of the period 2002–05. Moreover, in the four years to May 2012, there were only 17 months in which the target was not met or exceeded—a significant improvement from the previous four-year period, when there were 34 months when the target was not met.

38. These two achievements—substantial flying hours and an increased rate of availability—have been delivered in the context of recent initiatives by Tactical Fighter SPO and the RAAF’s Air Combat Group. These initiatives have included:

• the introduction of a new level of Deeper Maintenance;¹⁰
• substantial reform of the timetable for Deeper Maintenance;
• consolidation of Deeper Maintenance into a single combined Defence/contractor workshop at RAAF Williamtown; and
• establishment of a Hornet Fleet Planning Cell to optimise the use of aircraft according to their maintenance schedule and their amount of accumulated structural fatigue.

39. The duration of Deeper Maintenance services has varied markedly over the last decade, as a result of the wide range of types of service to be undertaken, from periodic services to comprehensive upgrades or modifications. Defence statistics indicate that, in recent years, maintenance of the Hornet fleet has become more difficult and more expensive, with the increasing emergence of airframe corrosion and fatigue issues. The general trend is for Deeper Maintenance services to exceed the targeted duration of 12 weeks, and as the fleet grows older, this trend is expected to continue.

40. The provision of spares to the F/A-18A/B Hornet fleet shows a moderate level of improvement over the last decade, with targets for demand-satisfaction generally being met, and delayed spares being supplied within reasonable margins. Tactical Fighter SPO is also managing carefully the variable costs and benefits of cannibalising parts versus replacing them.

Chapter 4—F/A-18A/B Hornet fleet structural integrity

41. The Hornet fleet’s structural integrity is the key to its ability to remain in service until the current Planned Withdrawal Date of 2020.¹¹ The structural integrity of aircraft is assured by a combination of maintenance regimes applied to airframe structures. While the integrity of most Hornet airframe structures is managed according to a safe-life regime based on airframe hours flown, the integrity of certain structures is managed through a safety-by-inspection regime. When a particular airframe structure has reached its safe-life limit according to hours flown, it may continue to be maintained under a more intensive—and therefore more expensive—safety-by-inspection regime. This regime seeks to locate, monitor and repair aircraft structures subject to fatigue cracking caused by repeated loading over time.

42. One of the principal objectives of the Deeper Maintenance services is to ensure that the structural integrity of the Hornet fleet is being assessed, and appropriate risk-reduction activities are being undertaken. Tactical Fighter SPO, in consultation with the RAAF’s Air Combat Group and the DSTO, and subject to approval by DGTA, implements an F/A-18A/B Aircraft Structural Integrity Management Plan, designed to provide a sound basis for aircraft structural-inspection programs, structural-life limits, and component retirement times.

43. The F/A-18A/B Hornet was designed for a safe life of 6000 airframe hours. At the current fleet flying rate of 13 000 hours per year, reducing to 12 000 from 2013–14, there is capacity on that basis for the Hornet fleet to continue flying until the end of 2020. However, this would require continuing close management of flying hours, to ensure that safe-life limits are not exceeded, and an expansion of the safety-by-inspection regime to include airframe structures that are increasingly susceptible to wear or corrosion-initiated fatigue-cracking. Using the fleet beyond 2020 may well require an expanded, and hence more costly, safety-by-inspection regime, structural modifications and capability upgrades.

44. At the time of this audit, Defence was considering the extent to which the Planned Withdrawal Date for the F/A-18A/Bs may need to be varied as a result of the US decision to move the F-35 Full-Rate Production decision out by three years to 2019 and any potential impacts of the Australian Government’s May 2012 Budget decisions to delay the acquisition schedule for the F-35 aircraft. Accordingly, the issues involved in any extension of the Hornets’ life beyond 2020 were not examined in this audit, although the principles involved in determining an aircraft’s safe life continue to apply.

45. Any consideration of the safe life of the F/A-18A/B Hornet (6000 airframe hours) also needs to factor in the fatigue stress the aircraft have experienced. While the Hornet fleet is operating within its safe life in terms of airframe hours, the rate at which it is accruing fatigue stress also requires effective management to ensure that the Hornet fleet can achieve its current Planned Withdrawal Date or indeed any extension to this.

46. Most of the aircraft in the Hornet fleet have exceeded an optimum amount of accumulated structural fatigue according to their airframe hours flown. Therefore their rate of fatigue accrual will have to be moderately reduced, or their fatigue life will be expended before they reach their safe life of 6000 airframe hours.

47. The RAAF’s Air Combat Group has informed the ANAO that rates of fatigue accrual have declined in recent years, with the advent of precision weaponry lessening to some extent the need for high-g manoeuvres, which increase aerodynamic loads on critical airframe structures. Nevertheless, the development and maintenance of tactical skills still requires air-combat training that includes high-g manoeuvres. In this light, continuous and effective management of fatigue accrual by Defence is required to underpin adequate levels of assurance that the fleet can meet its Planned Withdrawal Date without structural fatigue limits being exceeded.

48. The structural-refurbishment programs for the Hornet fleet since 2003 have played a large role in enabling the extension of the Planned Withdrawal Date to 2020. These programs have included centre barrel replacements on ten aircraft, as well as ongoing structural modifications to the remainder of the fleet. By December 2010, expenditure on these programs amounted to $433.04 million. At that time, the Hornet Structural Assurance Consolidation Program was approved, at a budgeted cost of $288.2 million. This program focuses on structural issues to ensure continued airworthiness through to December 2020.

49. Corrosion is also a significant threat to the continued airworthiness of aged aircraft, over and above the limitations imposed by airframe hours and fatigue. While not yet affecting airworthiness, corrosion can be expected to pose the most significant risk to the achievement of the Planned Withdrawal Date of 2020.

50. The incidence of discovery of airframe corrosion in the Hornet fleet is increasing, and the annual cost of corrosion-related repairs has increased significantly, from $0.721 million in 2007 to $1.367 million as estimated by Defence records in 2011. Corrosion-related maintenance has reduced the availability of the fleet by some 1381 aircraft days annually, up from 573 days in 2007.

51. Efforts to control airframe corrosion at RAAF Williamtown have been adversely affected by the closure of its Corrosion Control Facility in early 2009, when it became the subject of a Comcare Prohibition Notice. At the time of the audit, refurbishment activities to support the reopening of this facility were to commence in October 2012 and to be completed in May 2013, subject to approvals, funding and the resolution of Comcare issues. The aircraft wash-down facility at Williamtown, first proposed in 1998 and commissioned in 2011, will assist in efforts to control the growth of corrosion, as will current initiatives to repaint the Hornet fleet along with other RAAF aircraft.

Chapter 5—F/A-18F Super Hornet fleet sustainment

52. The decision in 2007 to acquire 24 F/A-18F Super Hornets, and their delivery in 2010–11, was intended to bridge the capability gap between the early retirement of the F-111 fleet (advanced from 2015–20 to 2010) and the eventual acquisition of the F-35 Lightning II Joint Strike Fighter. In the defence context, the period of four years between the decision to acquire the Super Hornet fleet and its arrival in Australia constituted a very short timeframe for the establishment of such a significant and complex capability.

53. To ensure that the Super Hornet fleet’s ongoing support and capability development occur cost effectively, Defence is seeking to maintain close commonality with the US Navy in terms of Super Hornet operation, maintenance and support. This is being achieved through a combination of commercial contracting and the acquisition of maintenance items and technical support via US Foreign Military Sales agreements.

54. However, at the time of the audit, the Super Hornet sustainment arrangements were in their formative stage, and adjustments were ongoing. At times, Tactical Fighter SPO has been unable to fulfil the squadrons’ demands for maintenance spares within specified timeframes. This has affected the availability of aircraft as specified in Materiel Sustainment Agreements between the RAAF and DMO.

55. Work is under way to implement a fatigue-monitoring system for the Super Hornet fleet, similar to the one that is in operation on the Hornet fleet. This system will enable a Structural Life Assessment that will help the Super Hornet fleet to achieve its Planned Withdrawal Date of 2025.

Summary of agency response

56. Defence provided the following response to this report and the companion report:

Defence welcomes the ANAO audit reports on the Management of Australia’s Air Combat Capability. These extensive reports demonstrate the complex and evolving nature of Australia’s air combat systems which are at the forefront of Australia’s Defence force structure. These reports also highlight a number of challenges that Defence faces in transitioning from its current 4th and 4.5th generation fighters into the 5th generation F-35A.

Defence has made significant progress towards increasing efficiencies and maximising combat capability over a decade of continuous air combat upgrades and acquisitions. The experience gained stands Defence in good stead for the acquisition of future air combat capabilities through a strong collegiate approach across the various areas of Defence, the Defence Materiel Organisation and external service providers. This experience will ease the burden during what will be a carefully balanced transition to the F 35A.

Defence acknowledges that there is scope to realise further improvements through process alignment and business practice innovation, and will continue to build on the work that has already been undertaken. Defence is committed to managing the complexities of its various reform programs whilst continuing to assure Australia’s future air combat capability requirements.

Footnotes

¹   Defending Australia in the Asia Pacific Century: Force 2030. Defence White Paper 2009, Canberra, 2009, paragraph 7.3, p. 53.

²   The Defence Portfolio consists of a number of component organisations that together are responsible for supporting the defence of Australia and its national interests. The three most significant bodies are: the Department of Defence, the Australian Defence Force (ADF) and the Defence Materiel Organisation. In practice, these three bodies have to work together closely and are broadly regarded as one organisation known as Defence (or the Australian Defence Organisation). All three of these component organisations are involved in the F-35A acquisition.

³   The F/A-18A/B ‘classic’ Hornet fleet is operated by 81 Wing’s No.3 and No.77 Squadrons and No.2 Operational Conversion Unit, which are located at RAAF Base Williamtown, New South Wales, and No.75 Squadron, located at RAAF Base Tindal, Northern Territory.

⁴   Prime Minister, Minister for Defence, Minister for Defence Materiel—joint press conference—Canberra, media transcript, 3 May 2012.

⁵   The F/A-18F Super Hornet fleet is operated by 82 Wing’s No.1 and No.6 Squadrons, which are located at RAAF Base Amberley, Queensland.

⁶   The retirement of the F-111 fleet had been planned for the period 2015–20, but in 2003 the RAAF advised the Government that, once several other capabilities had been achieved, the F-111 could be withdrawn from service by 2010. The United States had retired all of its F-111 aircraft by 1998, leaving Australia as the only country still operating that aircraft.

⁷   As a result of the US decision to move the F‑35 Full-Rate Production decision out by three years to 2019, and the Australian Government’s consequent May 2012 Budget decisions to delay the acquisition schedule for the F‑35 aircraft, the Planned Withdrawal Date is likely to be extended. ANAO Audit Report No.6 2012–13, Management of Australia’s Air Combat Capability—F‑35A Joint Strike Fighter Acquisition, 27 September 2012.

⁸   This decision delayed delivery of 12 of the first 14 F-35A aircraft and postponed a decision on the next 58 aircraft until beyond 2013.

⁹   Currently, the RAAF’s 24 Super Hornets (the F/A‑18Fs) have a Planned Withdrawal Date of 2025, and so will form part of Australia’s air combat capability even after the planned entry into service of the F‑35As and the withdrawal of the F/A‑18A/Bs. In August 2012, the Government also announced its decision to acquire the Growler electronic warfare system for 12 of the Super Hornets, with the total capital cost estimate for this acquisition around $1.5 billion. Accordingly, the Planned Withdrawal Date for the Super Hornets may be reviewed.

¹⁰   Deeper Maintenance includes scheduled maintenance, unscheduled maintenance and repairs, which require extensive Repairable Item dismantling in specialised jigs, and the use of specialised support equipment, technical skills or industrialised facilities.

¹¹   Structural integrity is the ability of a structure to withstand its operational service conditions safely and reliably throughout its planned lifetime.