The Center for Strategic and Budgetary Assessments (CSBA) estimates that the U.S. portion of the just-concluded NATO air campaign against Yugoslavia cost some $1.8 billion to $3.0 billion.¹ During the operation, the U.S. military deployed some 1,000 combat and support aircraft to the region, plus 24 Apache attack helicopters, 18 Multiple Launch Rocket System (MLRS) artillery pieces and some 5,500 supporting Army troops. The president also called up about 5,000 reserve personnel to support the operation. Based on the relative contributions of the U.S. and its NATO allies to the operation, a very rough estimate of allied costs incurred during the air war would be some $500 million to $1 billion, bringing the total cost of the air operation to some $2.3-4 billion.

Estimating the costs of military operations is an inherently difficult and uncertain task. It is made even more difficult in this case because the operation has just ended and DoD and NATO officials have not yet provided detailed information on many of the factors that could affect the cost of the operation. These include, for example, the number of missions flown by different types of aircraft, and the numbers and types of precision-guided munitions (PGMs) employed. Thus, this should be viewed as only a rough preliminary estimate of the costs of Operation Allied Force.

Peacekeeping Operations
As part of the peace agreement, the U.S. plans to deploy 7,000 troops to Kosovo as part of a 50,000-troop NATO-led multinational peacekeeping force. CSBA estimates that the deployment these U.S. peacekeeping troops will cost about $2-3.5 billion a year to support.² This figure reflects the incremental costs of the operation—i.e., the additional costs that would be incurred by the U.S. military above normal peacetime costs as a result of conducting the operation. Based on this estimate, peacekeeping operations through the end of the fiscal year (September 30th), if begun in the next several weeks, would be projected to cost perhaps $1 billion. But funding requirements could be higher if there are significant up-front “startup” costs.³

These estimates do not include all of the costs (incurred to date or prospectively) associated with providing humanitarian assistance to Kosovar refugees, or rebuilding homes, factories and other facilities damaged or destroyed during the NATO air campaign.

Paying for the War and its Afermath
The administration and Congress recently enacted an emergency supplemental appropriation to cover the costs of the air war against Yugoslavia through September 30th and to pay for a number of other Department of Defense (DoD) priorities, including a pay raise and changes to the military retirement system. Of the $10.9 billion in DoD funding included in the supplemental, at least $5.0 billion was clearly provided to pay for the war. Assuming the air war cost $1.8-3.0 billion, this suggests that DoD may have $2-3 billion remaining from the supplemental which it could use to pay for Kosovo peacekeeping operations. In other words, DoD should not require any additional funds to cover the cost of Kosovo peacekeeping operations, at least through end of fiscal 1999.

Basis for Estimate
In estimating the cost of Operation Allied Force, CSBA used two methodologies. The first is a top-down approach based on U.S. experience during the 1991 Persian Gulf War. The second relies on a bottom-up methodology and defines costs more narrowly.

Top-Down Cost Estimate: During Operation Desert Storm U.S. Air Force aircraft flew about 70,000 sorties (i.e., round-trip missions by individual aircraft) and incurred incremental costs (i.e., costs above and beyond those incurred as part of normal peacetime operations) of $14-15 billion (FY 1999 dollars).⁴ By comparison, Operation Allied Force has so far involved a total of some 35,000 sorties, of which perhaps 23,000 have been flown by U.S. aircraft.⁵ Assuming costs are directly related to the number of sorties flown, this would imply costs of about $4.8 billion for U.S. aircraft operations in Operation Allied Force.⁶

However, for a number of reasons, this would probably substantially overstate U.S. costs. Among other things, the $14-15 billion estimate of Air Force costs in the Gulf War includes not only the costs incurred as a result of flying some 70,000 sorties during the 6-week Desert Storm Operation, which began on January 17, 1991, but also costs incurred in the preceding five-and-a-half months (Iraq invaded Kuwait on August 2, 1990). During this period, the operational tempo (OPTEMPO) of U.S. Air Force units was increased substantially both to prepare for the upcoming counter-offensive and to support Operation Desert Shield, the defensive phase of the Gulf conflict. The $14-15 billion estimate also includes the costs of transporting aircraft and ground support personnel and equipment to the Gulf region, basing those forces and sustaining them with food and other supplies for many months, and redeploying those forces to their home bases after the war.

Although some transportation and sustainment costs have been incurred in Operation Allied Force, those costs are probably substantially less—on a per troop or per aircraft basis—because the distance between U.S. and European NATO bases and Yugoslavia is significantly shorter than the distance between those bases and the Persian Gulf. Moreover, OPTEMPO costs directly related to aircraft sorties—e.g., fuel, spare parts, and maintenance and repair costs—should be lower because NATO air forces stationed in Aviano, Italy and the Adriatic Sea need not fly as far to hit targets in Yugoslavia as coalition air forces operating from bases in Saudi Arabia and elsewhere in the Gulf region had to travel to hit targets in Kuwait and Iraq. In addition, after the war, the Air Force incurred substantial costs related to refurbishing aircraft deployed to the Gulf region for many months. Adjusting for the shorter distances involved in Operation Allied Force, the lower sustainment costs likely to be incurred, and possibly lower refurbishment costs, a better estimate of the cost of U.S. aircraft operations against Yugoslavia would be about $2.2 billion.

In addition, Navy ships have launched perhaps 450 Tomahawk land-attack cruise missiles, which cost about $1 million apiece.⁷ And the Apache deployment (including the cost of the two helicopters lost in training accidents) has cost the Army perhaps $300 million.⁸ Thus, altogether, a reasonable “top down” extrapolation from U.S. experience in Desert Storm would imply total incremental costs for Operation Allied Force of some $3.0 billion.

Bottom-Up Cost Estimate: The second approach used to estimate the incremental costs of Operation Allied Force relies on a “bottom-up” methodology and defines those costs more narrowly. Assuming that the average U.S. aircraft incurs direct costs of about $10,000 per sortie, the direct cost of flying 23,000 sorties would amount to some $23 million.⁹ To these operating costs must be added the cost of the munitions expended in the operation. As noted earlier, Navy ships have launched perhaps 450 Tomahawk land-attack cruise missiles. Likewise, Air Force B-52 bombers have launched some 90 conventional air-launched cruise missiles (CALCM). At roughly $1 million for the Tomahawk and $2 million for the CALCM, these cruise missile attacks have cost the Defense Department about $630 million.¹⁰

Estimating the costs of other munitions used in Operation Allied Force must of necessity be more speculative because DoD officials have provided no details on the number of other PGMs or unguided munitions expended. However, only perhaps 5,200 of the U.S. aircraft sorties have involved strikes on ground targets. The rest have been support missions flown by, for example, reconnaissance aircraft, tankers and electronic warfare aircraft. Assuming that on average two PGMs were expended in each strike sortie and that the average PGM used in these missions cost about $50,000, another $520 million of munitions would have been used during the 11 week operation. In addition, $150 million or more in munitions may have been used by supporting aircraft flying air-to-air and air defense suppression missions. (The table on page four provides a list of the types and costs of various munitions.) Equipment losses have added about another $180 million to U.S. costs.¹¹ Finally, perhaps another $300 million has been spent on the deployment of the 24 Apache helicopters, other Army equipment and 5,500 Army troops to Albania, plus the call up of some 5,000 Air Force reserve personnel. Altogether, this second approach yields a cost estimate for Operation Allied Force of some $1.8 billion. See Table

For more information, contact Steven Kosiak or Elizabeth Heeter at 202-331-7990.

The Center for Strategic and Budgetary Assessments (CSBA) is an independent policy research institute established to promote innovative thinking about defense planning and investment strategies for the 21st century.

© 1999 Center for Strategic & Budgetary Assessments. All Rights Reserved.

1. Unless otherwise noted, all costs in this analysis are expressed in FY 1999 dollars.

2. Steven Kosiak, “After the War: Kosovo Peacekeeping Operations Could Cost U.S. $2-3.5 Billion a Year,” CSBA, June 7, 1999.

3. Costs incurred over the first 3-4 months of a peacekeeping operation in Kosovo (i.e., through the end of the fiscal year) might be higher than the roughly $150-300 million monthly costs implied by annual cost estimates of $2-3.5 billion because of the need to improve or repair roads and other infrastructure in Kosovo and neighboring areas to support the deployment.

4. The Air Force was reimbursed for only about $12.2 billion of these costs. The total incremental cost of the Gulf War, for all Services, was about $61 billion in current dollars, or about $71 billion in (inflation-adjusted) FY 1999 dollars.

5. To date, roughly two-thirds of the NATO aircraft involved in the operation have been U.S. aircraft.

6. Most U.S. sorties have been flown by Air Force aircraft. However, some sorties have been flown by U.S. Navy and Marine Corps aircraft. It is assumed here the each of these sorties costs the same as the average Air Force sortie.

7. Under this methodology, the cost of the CALCMs used in Operation Allied Force is captured in the $2.2 billion estimate of Air Force costs since the $14-15 billion estimate of Air Force Gulf War costs also includes the costs of munitions expended.

8. Excluding the cost of the two lost aircraft, the Army claims to have spent about $250 million supporting the deployment through May 31. Ron Laurenzo, “Apache Deployment Has Cost Quarter Billion So Far,” Defense Week, June 7, 1999, p. 6.

9. For the sortie costs of a number of different U.S. combat aircraft, see General Accounting Office (GAO), Operation Desert Storm: Evaluation of the Air Campaign, June 1997, p. 166.

10. Since the Tomahawk is still in production, the figure used is the unit procurement cost of the most recent new Tomahawks. By contrast, since the air-launched cruise missile (ALCM) is no longer in production, the average unit procurement cost is used. However, this may overstate the cost of the CALCM since, at a much lower cost, the Air Force can convert additional nuclear-capable ALCMs to CALCMs. The supplemental request includes $178 million to convert 322 nuclear-capable ALCMs to CALCMs.

11. To date the U.S. has lost one F-117 (about $70 million), one F-16 (about $25 million), one AV-8B ($35 million) and several unmanned aerial vehicles (perhaps $20 million total) in operations over Yugoslavia. In addition, two Army Apache helicopters (about $15 million each) have crashed in training operations related to operations in Kosovo. Note, the unit procurement cost of these aircraft in current year dollars is somewhat lower (e.g., $43 million for the F-117).