The cost to replace the Air Force’s aging aircraft fleet and build new advanced jets is only expected to rise over the next three decades, averaging between $15 billion and $23 billion through 2040, according to a new Congressional Budget Office report.

The CBO report, titled “The Cost of Replacing Today’s Air Force Fleet” and released Dec. 11, projects that the cost of procuring new Air Force aircraft will surpass $15 billion in the mid- to late-2020s, peaking at around $26 billion in 2033.

Two F-35A Lightning IIs from the 388th Fighter Squadron, Hill AFB, Utah, and three F-15C Eagles from the 493rd Fighter Squadron, RAF Lakenheath, England, fly in formation during a training sortie over the United Kingdom, April 27, 2017. The F-35As first arrived at RAF Lakenheath on April 15, 2017, which marked it's first flying training deployment to Europe. (U.S. Air Force Photo/Tech. Sgt. Roidan Carlson)
Two F-35A Lightning IIs from the 388th Fighter Squadron, Hill AFB, Utah, and three F-15C Eagles from the 493rd Fighter Squadron, RAF Lakenheath, England, fly in formation during a training sortie over the United Kingdom, April 27, 2017. The F-35As first arrived at RAF Lakenheath on April 15, 2017, which marked it’s first flying training deployment to Europe. (U.S. Air Force Photo/Tech. Sgt. Roidan Carlson)

“Costs of procuring new aircraft would not fall below $20 billion until 2039 and would remain above typical historical levels past 2045,” the report said.

These projections are significantly higher than procurement costs in more recent years: Between 2010 and 2017, the Air Force averaged about $9 billion for new aircraft procurement and about $12 billion between 1980 and 2017, including the years of buildup under President Ronald Reagan, the report said.

The Air Force’s appropriations for new aircraft buys topped off in 1986, at about $29 billion, and CBO does not anticipate costs reaching that level.

Even if the service modified current retirement plans and replacement schedules to “smooth out” the 2033 peak, the CBO still projects the average annual costs for procuring new aircraft to be around $15 billion in the 2020s, $23 billion in the 2030s and $15 billion in 2040s. The report was conducted using constant 2018 dollars.

The $26 billion spike in 2033 would be largely due to the hefty price tags of the B-21 bomber, being built by Northrop Grumman [NOC], the Lockheed Martin [LMT]-made F-35A Joint Strike Fighter and a proposed “penetrating counter air” (PCA) aircraft that could replace the Air Force’s F-15C/D fleet and its F-22 jets.

CBO’s estimate includes 35 different replacement systems, but six programs cover over 85 percent of the projected costs of procuring new aircraft, the report said. Those include the F-35A, the PCA aircraft, the KC-46 next-generation tanker in development by Boeing [BA], the B-21 bomber, a C-17 replacement cargo aircraft, and the C-130J cargo aircraft.

The office’s report projects that the F-35A would be the most expensive program through the late 2020s, until funding is needed for the penetrating counter air aircraft in the early 2030s. “That program would become the most expensive until the late 2040s,” the report said.

The Air Force has indicated a need to field a new highly advanced air superiority aircraft by the mid-2030s, and the CBO report assumes the service would purchase 414 penetrating counter air aircraft in 2028 at the earliest, at an average procurement unit cost of $300 million.

“CBO projects that, by 2050, the PCA aircraft would replace the roughly 400 F-15C/Ds and F-22s that the Air Force operates today,” the report said. The $300 million price tag is based on the fact that a penetrating counter air jet would likely have a greater range and payload than the F-22, as well as improved stealth and sensor capabilities. “Those characteristics would help it operate in the presence of the high-end air defenses that DoD believes China, Russia, and other potential adversaries may have in the future,” it said.

The office also takes into account the cost increases sustained by the Air Force’s current stealthy aircraft, such as the B-2 bomber and the F-22 and F-35 fighters.

“Because of the high cost and uncertainty about the aircraft’s characteristics, reasonable changes in assumptions about the PCA aircraft could have a sizable impact on CBO’s projections of total Air Force costs,” it said. If the service opted to purchase more F-35As instead of building a new aircraft, the peak for new aircraft procurement could be $20 billion in 2033, rather than $26 billion.

To save procurement dollars, the service could also pursue a “hybrid” aircraft combining the F-22’s airframe with the F-35A’s avionics systems, as Lockheed Martin has proposed for Japan, or replace the capability with a network of sensors on existing aircraft linked by an advanced battle management system, the way it has proposed to replace its fleet of E-8 Joint Surveillance Target Attack Radar System (JSTARS) aircraft.

The Air Force’s proposed off-the-shelf light attack aircraft (LAA) – which would provide close air support in permissive environments – would not considerably affect its procurement budget forecast, according to the CBO. The report assumes the service would procure 100 light attack aircraft in the early 2020s, and allocated about $24 million for a plausible procurement unit cost.

“Because the procurement cost of an LAA would be comparatively modest and the fleet sizes being considered are relatively small, whatever approach the Air Force selects will not have a large impact on the total costs of procuring new aircraft,” the report said.

The Air Force could also plan to extend the service life on existing aircraft rather than purchase new systems, the report said. But it noted that replacement parts for aging aircraft can be both difficult and expensive, and even souped-up versions of older platforms may not provide the same mission capability as a brand-new fleet.

“Alternatively, the Air Force could delay a new system and let the size of a fleet shrink as older aircraft retire, creating a smaller fleet in the interim,” the report said.

The CBO based its evaluation on the Air Force’s publicly stated plans for aircraft retirement and replacement, and projected that by the late 2040s, the service would decrease operations of the A-10 attack aircraft along with the F-15C/D, F-15E, F-16 C/D and F-22 fighters, relying by then on the F-35A, a new light attack aircraft and the PCA aircraft.

The report was conducted at the request of the Senate Budget Committee’s chairman, Sen. Mike Enzi (R-Wyo.), and ranking member, Sen. Bernie Sanders (I-Vt.).