Is a capability gap looming? Photo: LACW Taylor Anderson, ADF.
One of the few newsworthy items out of April’s 2026 National Defence Strategy (NDS) and May’s Defence budget was confirmation that the Royal Australian Air Force’s fleet of 10 Leonardo/L3Harris C-27J Spartan transports would soon be retired after barely a decade in service.
While no timetable for the retirement was laid out in the documents, they did say the aircraft would be replaced by a commercial aircraft, and is part of a broader restructuring of the ADF to focus more on being able to project power at greater distances from Australia.
But several media outlets have reported the retirement as imminent or at least by the end of 2026, meaning there will likely be a capability gap left while a replacement is sought and enters service.
The C-27J entered service with the RAAF in 2015 to replace the venerable Vietnam-era DHC-4 Caribou under the Project AIR 8000 Phase 2 Battlefield Airlifter requirement.
Originally acquired through a US Department of Defense Foreign Military Sales construct, Australia’s 10 C-27Js were built by Leonardo in Italy but were modified by L3Harris in Texas supposedly as part of a larger fleet of up to 120 Joint Cargo Aircraft (JCA) to be operated by the US Air Force and US Army.
The initial attraction for Australia of the C-27J was its robust structure and field handling, its commonality with the US JCA, and the fact its avionics and engines were essentially the same or similar to those of the larger C-130J Hercules of which Australia operates 12 and will soon introduce 20 new build models.
But before a single C-27J had been flown let alone delivered to Australia, the JCA program was halted, with the 38 aircraft for the US built to date de-modified and farmed out to the US Special Operations Command (SOCOM) parachute school, and to the US Coast Guard (USCG) as HC-27Js configured for maritime rescues.
History shows that, despite only having two engines and being a smaller aircraft, the operating cost of the C-27J in US service was nearly 50 per cent more than that of a C-130J, although the C-130J is operated in much larger numbers and has a much more robust sustainment system in place.
There are about 120 C-27Js in service with other nations including Italy, Bulgaria, Romania, Morocco, Mexico, Peru, Kenya, and Slovenia.
But the cancellation of the JCA program effectively left Australia as an orphan operator of a highly-modified variant which doesn’t align with manufacturer Leonardo’s baseline configuration, meaning it has a much narrower sustainment pipeline and uniquely Australian airworthiness requirements.
Since the 10th C-27J was delivered in 2017, the aircraft has been described as “troublesome” in RAAF service, with reports of lower than desired availability rates, delays in obtaining spare parts, and difficulty integrating a missile approach warning system (MAWS).
But other “troublesome” RAAF projects have since gone on to be world-beaters – the E-7A Wedgetail AEW&C, KC-30A MRTT and C-17A transport all had very difficult developments, and even the C-130J took more than a decade to reach maturity.
Even so, in 2020 the C-27J’s mission was changed from the Battlefield Airlifter role to that of a Light Tactical Fixed Wing transport. This essentially took it off the front line and relegated it to a support role, where it has been particularly effective in providing transport, aerial surveillance and fisheries monitoring in support of Australia’s foreign policy objectives in the Pacific under Operation Solania.
The C-27J is ideally suited to the Pacific mission, being a stable platform with good speed and range, and able to operate into short and unprepared airfields wholly unsuitable for the C-130J or even larger C-17A.
And in recent years availability has improved, with Defence annual reports showing actual operating hours of the RAAF’s C-27J fleet being close to that budgeted. In 2023-24 the fleet flew 4916 against a budgeted 5500 hours, and in 2024-25 it flew 5048 hours against a budgeted target of 4800.
Defence insiders say the C-27J is currently approaching issues with obsolescence with some of its avionics, in particular with its Mode 4 Identification Friend or Foe (IFF), an encrypted transponder system that allows the aircraft to safely operate in international and contested airspace.
But the Mode 4 IFF will soon be superseded by a new Mode 5 system which uses cryptographic algorithms. And because there is no configuration baseline for the RAAF’s C-27Js, much of the risk and analysis for an installation of Mode 5 will be required to be undertaken in Australia.
This work will likely cost several hundred million dollars which sounds like a lot, but is cheap compared to buying a whole new and likely less capable aircraft. But the apparent reluctance by Defence to do the work appears more likely related to risk management rather than cost or any technical challenges.
Indeed, the decision to retire the aircraft – all of which are fully paid for and for which a sustainment and training system has been established and has matured – seems counterintuitive compared to the cost of and time required to dispose of the C-27J aircraft and training systems, acquire or more likely lease a new aircraft type and support system, and then getting that up to a suitable operational standard.
Are we seeing a repeat of the MRH 90 Taipan helicopter debacle where 45 perfectly serviceable and very capable helicopters that were only halfway through their planned service lives were scrapped and disposed of in favour of spending $5 billion on new Black Hawks with no satisfactory explanation from Defence or the relevant ministers?
