The new F35 fighter jets that Norway ordered from Lockheed-Martin in the US have suddenly become even more expensive because they’re priced in dollars. The dive in the value of Norway’s own currency means they’ll cost far more kroner than anticipated, but defense ministry officials claim they’re not too worried.
Defense Minister Ine Eriksen Søreide, who was in Texas this week when the first Norwegian F35 ceremoniously rolled out of the factory, told newspaper Dagens Næringsliv (DN) that the suddenly unfavourable exchange rate for Norway won’t have any consequences “as of today.”
If the US dollar remains as strong as it is now against the Norwegian krone, “we will of course continue to update the cost picture,” Søreide said as she formally took delivery of the first jet.
Both Søreide and Brigadier Morten Klever, chief of the Norwegian F35 program, stressed that the jets were being delivered ahead of schedule, at the agreed price and with capacity as ordered. “Our prognoses, even with today’s dollar exchange rate, are holding,” Klever told DN. “We’re within the framework on which the Parliament based the purchase.”
Replacing the F16s
Norway has ordered up to 52 new F35 jets to replace the country’s current fleet of ageing F16s. The new jets, all of which are to be delivered by 2025, represent Norway’s single biggest expenditure ever, apart from offshore oil installations.
The price was set at NOK 68 billion based on an exchange rate of NOK 6.47 to one US dollar. Now it costs around NOK 8.2 to buy a dollar, roughly a 30 percent increase over the level set on the jet deal. That could boost the actual price of the jets to NOK 86 billion, if the krone remains as weak as it is now over the next 10 years.
Many analysts think that’s unlikely but Klever himself conceded there may be “challenges” regarding the cost in kroner of maintenance over the jets’ 30-40 year lifetime. “We’re very keen to keep the Parliament oriented, and if we see a problem, the Parliament will be the first to be informed,” he said.
Meanwhile, he, Søreide and the Norwegian delegation on hand for the ceremony in Fort Worth were in a celebratory mood. “This is a critical investment in our defense ability,” Søreide stated. She called Tuesday’s delivery “an historic milestone” for the Norwegian military. “It’s a joy to see the results of the lengthy and thorough process we have carried out,” she said. Politicians, she claimed,have “over time stood together on this important project and now we see the first concrete results.”
The first F35s delivered to the Norwegian air force will be used to train Norwegian pilots in the US. The first jets won’t actually arrive in Norway until 2017, and then will be based at the Ørland air station in Sør-Trøndelag. They’ll start replacing Norway’s current F16s beginning in 2019.