December 10, 2014 / 10:44 PM / 4 years ago

Canada to continue in F-35 fighter program but outlines risks

OTTAWA (Reuters) - Canada will stay part of Lockheed Martin Corp’s F-35 Joint Strike Fighter program while a decision is made on whether to actually buy the plane, the government said on Wednesday.

But Ottawa outlined several risks to the program, which has been hit by major delays and cost overruns. The risks include software delays and limitations as well as affordability.

The decision on how to replace Canada’s current ageing fleet of Boeing Co CF-18 fighters has become a major political problem for Canada’s Conservative government.

Ottawa announced a sole-source contract for 65 F-35s in 2010 but changed its mind in 2012 after a parliamentary watchdog savaged the decision. It is now mulling whether to hold an open competition or confirm the original decision to buy the F-35s.

“No decision has been made on the replacement of Canada’s fighter fleet,” the government emphasized in a statement accompanying several reports on the fighter jet file.

Ottawa also slightly increased the total cost of buying a fleet of F-35 jets to C$45.8 billion ($39.8 billion) from a 2013 estimate of C$45.7 billion.

Canada was one of the original nine partners in the F-35 program, which gave Canadian firms a chance to compete for contracts. Canadian firms have won US$637 million in contracts and had identified opportunities of another US$10.2 billion in contracts, one of the reports said.

The delays over deciding what to do next means Canada has already had to extend the operating life of the CF-18 fleet to 2025 from 2020 at an estimated cost of C$400 million.

One of the reports said it might be possible to keep the jets in service until 2030 but this would cost a total of C$1.5 billion and would also be technically challenging.

The other jets in the running are Boeing’s F-18 E/F Super Hornet, Dassault Aviation SA’s Rafale and the Eurofighter Typhoon, jointly made by BAE Systems PLC, Finmeccanica SpA and Airbus Group NV.

A source with direct knowledge of the matter told Reuters in September that Canada was likely to choose between the two U.S. firms when it bought new fighters.

Editing by James Dalgleish

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