Austria: Eurofighter Saga Continues

The Eurofighter has had a rough ride in Austria. From the very beginning and since the previous center-right government made the strategic acquisition decision back in 2002, the aircraft has been a lightning rod of political disagreement and at the center of national defense debate.

While the ruling People's Party (ÖVP) initiated the procurement process in 2002, the opposition Social Democrats (SPÖ) invested a lot of political capital into ensuing attempts to prevent and possibly cancel the purchase of the expensive fighter jets. The SPÖ campaigned hard in the 2006 general elections with a Eurofighter cancellation platform; and even though the party won the election with 35 percent of the vote, it had no choice but to form a grand-coalition government with the ÖVP, forcing the SPÖ into a political compromise and making it impossible for the party to reverse the purchase process.
 
Ironically, Norbert Darabos, a declared SPÖ opponent of the jets, was appointed defense minister in the new government and in turn the aircraft became his direct responsibility. Unable to cancel the water-tight contract with the Eurofighter consortium, Darabos still embarked on path of negotiations with EADS in an attempt to secure a face-saving deal for his party and to partially appease the segments of the Austrian population that were opposed to the jet.

While EADS had clearly outlined to the Austrian government that canceling the contract would carry with it a €1.2 billion ($1.66 billion) penalty in exchange for zero aircraft, the company was willing to negotiate the final number of actually supplied jets, and in turn Darabos was able to reduce the Austrian purchase order from 18 to 15 in 2007. From the initial contract value of close to €2 billion for 18 jets, the negotiated reduction to 15 represented a net savings of about €250 million.
 
Increased cost, fewer jets

While Darabos was quick to trumpet his horn and represent his agreement with EADS as a boon to the Austrian taxpayer,  subsequent verification by the Rechnungshof, the Austrian government's oversight office, however quickly showed that the change in contract conditions actually created completely new delivery parameters and also featured many negative side-effects.

Aside from reducing the total number of jets to 15, Darabos also slashed various options for technical upgrades and advanced equipment, such as the modernization of the jets to cutting-edge Tranche-2 standards or the fitting of nighttime infrared gear.

Furthermore, Darabos also accepted that 6 of the delivered aircraft may have been previously used and others may feature used components. The various reductions from the global budget also meant that EADS was able to cut its industrial off-set obligations and therefore the Austrian economy received less in exchange spending.

All in all, the 2008 report by the Rechnungshof calculated that instead of getting 18 state-of-the-art Tranche-2 jets at a price of €109 million each, as stipulated by the original contract, the revised Darabos deal meant that Austria was suddenly paying an increased unit price of €114 million for 15 partially used, less-advanced Tranche-1 jets. Not only the Rechnungshof concluded that the math didn't equate and EADS got the better end of the deal; the Austrian parliament and media in turn ripped Darabos, some even openly calling for his resignation.

Eurofighter deal plagued from start

The competitive €109 million price per jet was actually one of the leading factors that led the Austrian government to choose the Eurofighter back in 2002. Aside from the perceived value in price and various economic off-set deals, the desire for a prestigious next-generation aircraft that was fully compatible with the air forces of the country’s larger neighbors, made the Austrian government choose the Eurofighter over competing US offers for less expensive F-16 fighters or Swedish lobbying for the Gripen.

Despite that, the final selection of the Eurofighter originally surprised many people in the Austrian armed forces when the deal was announced. Many proponents from the Austrian air force had assumed that the Gripen would be the favored choice for a next-generation fighter, as Austria had just flown the Saab-built predecessor model, the Draken, since the 1970s.

While initially most of the political and financial controversy over the Eurofighters surrounded their almost €2 billion price tag, much of the follow-up argument has since then focused on cost overruns in infrastructure adaptations to house the jets, as well as disagreements over projected annual and lifetime operation costs.

The jets came under fire again recently when the defense ministry had to concede that infrastructure improvements at the Zeltweg airbase, the only base in the country adapted to host the aircraft, had ballooned from €49 million to €160 million. This quickly led the opposition Green Party to call for an inquiry and to label the Zeltweg facility as a posh “Eurofighter Palazzo.”

On the operations front, the Austrian Defense Ministry has allocated €32 million per annum for the deployment and maintenance of the jets, even though a calculation by the Rechnungshof has estimated operations for 1500 flight hours to cost €50 million a year, later even climbing to over €100 million a year after 2013. If those projections prove accurate, and without the implementation of financial adjustments, the Austrian armed forces would have to cover the additional Eurofighter operations costs with funds originally earmarked for other purposes.

According to Professor Heinz Gärtner from the Austrian Institute for International Affairs, “Austria’s main defense profile lies in international missions and disaster relief.  For these tasks the Eurofighter is useless,” he told ISN Security Watch.

“Territorial defense is only of tertiary importance. The high acquisition and maintenance costs of the Eurofighter require necessary cuts in other areas, such as helicopters, armed vehicles, air lift and surveillance, reconnaissance and communication.”

From a tactical point of view, the technical limitations and the politically induced downgrades of the aircraft have also forced the Austrian air force to forego any options for air defense and focus strictly on air policing responsibilities. Even there it seems handcuffed, as at present the 15 jets must share between themselves a total of 20 purchased missiles. 

Although the Austrian government attempted to break away from the country’s image as one of the lowest spenders on defense matters, opting for a big-name, cutting-edge plane like the Eurofighter, the jet has so far only proven to be prestigious on paper and has been handcuffed by political processes and widespread unpopularity.