Photo: Master Sgt. Tristan McIntire/ U.S. Air Force
In 1979, Department of Defense (DOD) official Norman Augustine conducted a legendary study of U.S. fighter aircraft cost growth over time. He found that the unit cost of new-generation fighter aircraft has increased, on average, roughly an order of magnitude every 20 years since 1910. Augustine observed, “In the year 2054, the entire defense budget will purchase just one aircraft. The aircraft will have to be shared by the Air Force and Navy [three and a half] days each per week except for leap year, when it will be made available to the Marines for the extra day.”
Though presented with his characteristic wit, Augustine’s data was entirely serious. His warning took on something of a mythic status in the Pentagon and was branded “Augustine’s Law.” In 2010, The Economist published an article updating the study with the latest fighter aircraft price data, finding the cost growth predicted by Augustine’s Law had continued in the three decades after his initial publication. In a quote for the article, Augustine noted, “We are right on target. Unfortunately, nothing has changed.” Figures 1 and 2 are taken from his original study and show the increasing cost of military aircraft over time and its projected share of the defense budget and U.S. gross national product (GNP).
Figure 1: Military Aircraft Cost Growth Chart from Norman Augustine’s 1979 Study
Source: Defense Systems Management Review (Volume 2, Number 2, 1979).
Figure 2: Military Aircraft Cost Growth as a Share of the Defense Budget and GNP from Norman Augustine’s 1979 Study
Source: Defense Systems Management Review (Volume 2, Number 2, 1979).
In the 14 years since the 2010 update, fighter aircraft prices have continued their rapid growth upward. By the time the F-35 reached initial operating capability in 2016, it had an average cost of $140 million, not including research and development or lifecycle sustainment costs. Meanwhile, Secretary of the Air Force Frank Kendall estimated that a manned Next Generation Air Dominance (NGAD) fighter would cost $300 million, so expensive that the Air Force plans originally envisioned purchasing only 200 of them. Given that Air Force fighters have a troubling history of exceeding initial cost estimates, the true NGAD figure might be even higher than the $300 million estimate. Because aircraft costs are so much greater, the Air Force now buys far fewer aircraft. For example, in fiscal year 2025, the DOD plans to procure 86 fighter aircraft, a 72 percent decrease compared to the number it procured in 1985.
At a recent CSIS event, former assistant secretary of the Air Force for Acquisition, Technology, and Logistics Will Roper underlined the grim reality of increasing fighter aircraft cost, saying, “Well, I remember the first time I heard of Augustine’s Law, and laughing, and then thinking, oh, this is not funny because there’s some real truth to this.”
Some have suggested that this cost growth is a result of the incredible complexity required to deliver the exquisite performance of modern weapons systems. Yet, a 2009 Defense Advanced Research Projects Agency (DARPA) study found high complexity technology areas like the automotive industry and integrated circuits achieved extraordinary performance improvements with practically zero cost growth. In other words, in technology-driven commercial industries, products have gotten both better and cheaper, yet in government-run fighter aircraft programs, performance improvements are accompanied by enormous price increases. In 2004, former defense comptroller Dov Zakheim made a similar observation that “[such findings are] not easy to fathom.” He noted that “One might have thought that more efficient production methods, including computer-aided design and manufacturing, microminiaturization of components, and the employment of greater computing power, all would have reduced costs or at least held them level.”
A full explanation of the drivers of government aerospace programs’ cost growth is beyond the scope of this article, but factors include the consolidation of the defense industrial base, the prevalence of cost-plus contracting, and the DOD requirements process, among other issues.
Recognizing the unsustainability of the status quo, Pentagon leadership launched the Collaborative Combat Aircraft (CCA) program. This Air Force program aims to field thousands of more affordable, autonomous, and uncrewed CCA aircraft. In an attempt to buck the trend of the last century, this program has a focus on innovative acquisition approaches and nontraditional defense contractors with expertise in AI and autonomy.
In doing so, the Air Force hopes to duplicate the cost reductions that government space programs have achieved with partners like SpaceX in recent decades.
According to a 2011 NASA review of SpaceX’s finances and costs, the entire development cost of the Falcon 9 launch vehicle (including the predecessor Falcon 1) was $400 million between SpaceX’s founding and the first launch in 2010. After 2010, NASA took the performance parameters of the Falcon 9 launch vehicle and input them into its NASA–Air Force Cost Model (NAFCOM), a common tool used in predicting the cost of government space systems. NASA was trying to assess how well NAFCOM could predict the cost of SpaceX’s launch vehicle under normal government program management assumptions. The result?
NAFCOM predicted development of the Falcon 9 alone would cost $3.977 billion under the typical NASA program structure and culture, more than 10 times the amount SpaceX actually spent. NASA further predicted that a more commercially oriented program management approach would still cost $1.7 billion, more than four times what SpaceX actually spent. The point is that the cost models NASA and the Air Force used to set cost targets had failed to imagine pathways to remarkably improved cost efficiency—without compromising performance or schedule—were even possible until they saw an existence proof in the form of SpaceX’s ultracheap Falcon 9.
CSIS has updated Augustine’s fighter cost growth dataset with the available figures in 2024. Figure 3 shows an updated Augustine’s Law and what low-cost autonomous fighter aircraft could mean for the future of U.S. air power. Secretary of the Air Force Frank Kendall estimated that one CCA would cost $25 million–$30 million. This is roughly 10 times cheaper than the original estimate for the unit cost of a manned 6th-generation fighter.
There are two caveats to keep in mind when considering the figure above. First, consistent with Augustine’s original study, the unit aircraft cost is in nominal dollars and is not adjusted for inflation. However, it is well established that military weapons systems experience cost increases larger than the rate of inflation. The overall story is much the same, with or without adjusting for inflation. Second, research, development, test, and evaluation spending and sustainment costs make up a significant portion of the DOD’s investment in fighter aircraft and are not captured in this analysis. For example, a 2023 Government Accountability Office report found that the lifecycle sustainment cost estimate for the F-35 program was $1.58 trillion.
While Figure 3 demonstrates the potential of autonomous aircraft as a more affordable alternative to manned fighters, it also offers a warning. The initial goal of the Low-Cost Attritable Aircraft Program (LCAAT), a direct ancestor of CCA, was to create a vehicle with a unit cost of $3 million. In other words, the projected price point of a “low-cost” autonomous fighter aircraft has jumped an order of magnitude in the last eight years. There are legitimate worries that CCA may fall prey to a typical DOD acquisition failure mode: a desire to chase improved performance regardless of cost and schedule. There is also the traditional DOD pressure to spread the money (and jobs) around to maximize U.S. Congressional support.
To ensure Augustine’s Law is in the DOD’s past and not its future, DOD leadership must combat the true sources of cost growth, even those that are politically sensitive.
To its credit, the DOD is making big bets on autonomous systems. In addition to its more than $9 billion investment in the CCA program, in August 2023, Deputy Secretary of Defense Kathleen Hicks announced the Replicator Initiative, aimed at fielding thousands of autonomous and attritable systems by August 2025. This effort extends the affordable mass concept beyond aircraft to cruise missiles, loitering munitions, and unmanned surface vehicles, in addition to other classified capabilities.
However, U.S. adversaries also have major autonomy initiatives underway. In December 2024, China unveiled a prototype of its Feihong FH-9, a “loyal wingman drone” designed for “confrontational, high-intensity and long-lasting combat.” AI-enabled and autonomous systems are the DOD’s best chance to break Augustine’s Law and are almost certainly the future of airpower. But the United States is not alone in heading there.
Gregory C. Allen is the director of the Wadhwani Center for AI and Advanced Technologies at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Isaac Goldston is a research associate with the Wadhwani Center for AI and Advanced Technologies at CSIS.
The authors would like to thank Seamus Daniels and Greg Sanders for providing helpful comments and suggestions on earlier drafts of this paper.
