Russia’s New Su-57 Fighters Cost Just $35 Million Each; Are Fifth Generation Jets Really Cheaper than the Su-35?

Following the announcement of a planned order by the Russian Air Force for 76 Su-57 next generation air superiority fighters, the price of the acquisition was reported by Russian media at just 170 billion - or $2.6 billion. This extremely low cost was met with much surprise by analysts - amounting to just £35 million per fighter where a price approximately three times this had been expected. Indeed, it was widely noted that $2 billion the contract for export of 24 Su-35 jets to the Chinese People’s Liberation Army Air Force in 2015 priced the fighters at $83.3 million each - 238% of the price of the Su-57 despite the fighters being considerably older lighter and less sophisticated. The extremely low cost has led to a number of allegations that the price quoted must be inaccurate, namely from Western sources, particularly given the relatively small scale of production relative to the Su-35 and foreign next generation jets such as the F-35A. A number of factors, however, are very likely at play in facilitating a far lower cost for the Russian Su-57 than had previously been expected. The first explanation for the lower cost of the Su-57 is that it likely addresses the cost of manufacturing jets alone - without factoring in research and development costs which are already sunk into the program and will not increase if more fighters are ordered. This can have a very significant difference on the quoted price of a combat aircraft. Lockheed Martin’s F-22 Raptor, the American analogue to the Su-57 which ended its brief production run in 2009, is a prime example - as well documented by a 2009 report from the Washington D.C. based think tank Centre for Strategic and Budgetary Analysis (CSBA). The report noted that when the $24.3 sunk cost of research and development (R&D) was included in the figure for the price per fighter, this grew to over $350 million per F-22 due. A price quote without accounting for R&D - known as the flyaway cost - was considerably lower and amounted to just $150 million per fighter. This cost itself was the result of considerable inefficiencies for which Lockheed Martin was largely faulted, with the aircraft initially expected to have a flyaway cost of exactly $35 million in the currency of 1985 - or approximately $60 million in 2009. The reason why its flyaway cost ended up 250% higher than this was, according to the CSBA report, due to “unfortunate timing, cost growth, and schedule slippage virtually from the outset.”

Following the announcement of a planned order by the Russian Air Force for 76 Su-57 next generation air superiority fighters, the price of the acquisition was reported by Russian media at just 170 billion - or $2.6 billion. This extremely low cost was met with much surprise by analysts - amounting to just £35 million per fighter where a price approximately three times this had been expected. Indeed, it was widely noted that $2 billion the contract for export of 24 Su-35 jets to the Chinese People’s Liberation Army Air Force in 2015 priced the fighters at $83.3 million each - 238% of the price of the Su-57 despite the fighters being considerably older lighter and less sophisticated. The extremely low cost has led to a number of allegations that the price quoted must be inaccurate, namely from Western sources, particularly given the relatively small scale of production relative to the Su-35 and foreign next generation jets such as the F-35A. A number of factors, however, are very likely at play in facilitating a far lower cost for the Russian Su-57 than had previously been expected. The first explanation for the lower cost of the Su-57 is that it likely addresses the cost of manufacturing jets alone - without factoring in research and development costs which are already sunk into the program and will not increase if more fighters are ordered. This can have a very significant difference on the quoted price of a combat aircraft. Lockheed Martin’s F-22 Raptor, the American analogue to the Su-57 which ended its brief production run in 2009, is a prime example - as well documented by a 2009 report from the Washington D.C. based think tank Centre for Strategic and Budgetary Analysis (CSBA). The report noted that when the $24.3 sunk cost of research and development (R&D) was included in the figure for the price per fighter, this grew to over $350 million per F-22 due. A price quote without accounting for R&D - known as the flyaway cost - was considerably lower and amounted to just $150 million per fighter. This cost itself was the result of considerable inefficiencies for which Lockheed Martin was largely faulted, with the aircraft initially expected to have a flyaway cost of exactly $35 million in the currency of 1985 - or approximately $60 million in 2009. The reason why its flyaway cost ended up 250% higher than this was, according to the CSBA report, due to “unfortunate timing, cost growth, and schedule slippage virtually from the outset.” Russian Air Force Su-57 Fifth Generation Fighter A second factor benefitting the Russian defence sector’s cost effectiveness, particularly when costs are measured in terms of American dollars, is the lack of parity in purchasing power - namely that with the Ruble low the dollar can buy far more in Russia than it can in Europe or the United States. While this does not address the lower cost of the Su-57 relative to the Su-35, it does largely explain why the fighter is so much less expensive than its American counterparts. Living costs in Russia are considerably lower, and the tens if not hundreds of thousands involved in the program across the supply chain and in the development teams, from designers to those who transport and refine materials and clean the assembly floors, are all paid far less than their counterparts in the West. The result is that a dollar can go a lot further in Russia than it can in America, and far moreso than in Europe where military aviation is notoriously poor in terms of cost effectiveness compared to the U.S. This is key to allowing Russia’s defence sector to undercut Western competition considerably in terms of pricing. A third factor which facilitates a lower price for the Su-57 that the aircraft are intended for the Russian Air Force - and according to a recent statement by President Vladimir Putin the United Aircraft Corporation which manufactures the jets have been persuaded to reduce their profit margins considerably to keep production lines open with domestic demand. This resulted in a fall in price of approximately 20% - meaning the original price was little over $42 million per fighter, or over two thirds of the intended flyaway cost of the F-22. This also goes a long way towards explaining the higher cost of the Su-35 jets acquired by China, with jets manufactured for export to states outside the Commonwealth of Independent States (CIS) priced higher to earn larger profits for reinvestment into the Russian defence sector - rather than reduced as in the case of the Su-57. While less resources are needed to manufacture a Su-35 than a significantly more complicated Su-57 therefore, China and other foreign clients will pay more for the lighter and older fighters than Russia pays itself for the newer one. Furthermore, it is important to note that while $35 million was the quoted flyaway cost for a Su-57, the Su-35 contract included delivery of ground support equipment, spare engines and munitions which in some cases cost over $1 million each such as R-77 and R-27ER long range missiles. The cost of very high value technology transfers were also accounted for - which represented millions if not more in Russia’s research and development investments. The flyaway cost of the Su-35, even at export rates, is thus considerably lower than $83 million - likely under $50 million. With the cost of the Su-57’s armament exceptionally high - including among other systems the K-77 long range air to air missile with active phased array antenna (APAA) guidance, the hypersonic R-37M air to air missile, and the Kh-59MK2 cruise missile - the cost of the fighters fully armed and with sufficient spare munitions would very likely exceed $50 million. Accounting for costs of pilot training, spare parts and engines and new maintenance infrastructure, this will be higher still. Thus the cost to export clients of the Su-57, with prices factoring in an larger profit margin for United Aircraft Corporation, extensive armaments suites, maintenance infrastructure, spares, engines, and coverage for part of the research and development costs, will likely reach over $100 million - particularly if contracts include stipulations for pilot training which are highly likely given the jet's unique design