Buying a plane isn’t like buying a phone. Still…

NIKHIL MORO in Mount Pleasant, Michigan, forwards two telling links on the “Super Hercules” cargo planes.

The first link is from Deccan Herald dated 7 February 2008. Headlined “India, US ink billion-dollar aircraft purchase deal”, it’s a Press Trust of India despatch from Washington. It reads:

WASHINGTON: India and the US have signed a billion-dollar (about Rs 3,900 crore) deal for purchase of six Super Hercules military transport planes from Lockheed Martin which Pentagon feels breaks the “psychological barrier” in bilateral defence cooperation.

The deal was signed recently following the Indian cabinet committee on security clearing last month the purchase of the six C-130J Super Hercules aircraft. The planes are expected to be delivered starting 2011.

“It is a very good plane and is very widely used. It is a workhorse and it has been used for 40 years but the ‘J’ type (C-130J) is amazing…it can really take off on a much shorter runway and India basically lacks this kind of an airplane,” James Clad, deputy assistant secretary of defence, said.

The second link is from Air-Attack dated 17 January 2008. Headlined “Lockheed receives $1.4 billion contract for 17 C-130Js for Canada,” the report cites a Lockheed Martin press release as source. It reads:

Marietta, GEORGIA: Lockheed Martin has signed a contract with the Government of Canada valued at $1.4 billion for the purchase of 17 C-130J Super Hercules airlifters and related equipment and services….

The Canadian Forces’ new Super Hercules will be the longer fuselage or “stretched” variant of the C-130J, similar to those being delivered to the U.S. Air Force. Deliveries to Canada will begin in 2010. Canada joins the growing number of nations with C-130J fleets. Allied operators include the United States, Australia, Demark, Italy, Norway and the United Kingdom.

The new C-130J generates much greater operational efficiency than the older C-130s, such as Canada’s E and H model, by flying farther, faster, with more payload and higher reliability. Additionally, the C-130J only requires three crew members for most missions so fewer flight crew members are exposed to potential threats in-theatre. C-130Js are being used daily for troop and equipment re-supply via ground delivery and airdrop, for air-to-air refueling, ground refueling and humanitarian relief.

If a billion dollars can fetch only six C-130Js for India, how can $1.4 billion fetch 17 C-130Js (and related equipment and services) for Canada? Is there more than meets the eye here? Is there something extra Lockheed Martin is throwing in for its new Indian friends now that it has opened an office in New Delhi?

In December 2007, the Canadian American Strategic Review listed the per-unit price of the C-130J at $65 million apiece. A report in December 2006 on India-Defence said the price per C-130J may “top” $70 million. Six planes=$420 million. Therefore, 17 planes=$1,190 million. How come six planes=$1 billion, 17 planes=$1.4 billion?