In the 21st century, there are fighter jets, and then there are fighter jets. Which kind you get depends on how much you want to pay.
Got hundreds of millions of dollars to toss around? Then like the U.S. government, you can hire Lockheed Martin (NYSE:LMT) to design and build you an F-22 Raptor stealth fighter -- widely considered the most capable air superiority combat jet in the world. (Of course, if you cut your production run short before efficiencies of scale kick in, the planes end up costing $412 million apiece.)
Those same $412 million could buy you a handful of Boeing's (NYSE:BA) perfectly serviceable fourth-generation F/A-18 or F-15 fighter jets, of course, retailing for about $100 million a pop. Or alternatively, if you're buying on a budget, you might enjoy a nice Soviet-era Sukhoi Su-34 "Fullback." (List price: $18 million.)
Depending on what a nation needs, various buyers pick various warplanes and various price points. But which are the most popular combinations today?
10. Chengdu J-7 Fishbed (no longer in production)
Holding steady at No. 10 on this year's edition of Flightglobal Insight "World Air Forces" report (link leads to a free download of the report) is the Chinese J-7 fighter jet. It's actually China's version of the old Soviet MiG-21 and is no longer produced. Still, 418 remain in service, giving the fighter a 3% global market share.
9. Chengdu F-7 Airguard, list price: $2-3 million
The export version of China's J-7 is dubbed F-7, and it's likewise a twin to Russia's MiG-21. The global population of F-7s declined by just one plane over the past 12 months and now stands at 459 aircraft, giving the F-7 a 3% market share as well.
8. Northrop Grumman F-5 Tiger, list price: $20 to $25 million (estimated)
Northrop Grumman's (NYSE:NOC) F-5 Tiger is no longer in production. Curiously, though, some decommissioned F-5s appear to have been resurrected from the grave over the past year, as Flightglobal says the number of F-5s in service grew from 468 a year ago to 482 today. That works out to a 3% market share as well.
7. Sukhoi Su-25 Frogfoot, list price: $11 million
Russia's answer to the American A-10 Thunderbolt II "Warthog," the Su-25 is a dedicated "tank-buster" aircraft. It's also more popular than the Warthog. According to Flightglobal figures, the U.S. Air Force only has 291 A-10s still in service -- but there are 503 Frogfeet flying around the globe, so 3% market share again.
6. Mikoyan-Gurevich MiG-21 Fishbed, list price: $25,000*
Once one of the world's most popular fighter aircraft, the number of working MiG-21s continues to dwindle. Its numbers have fallen from 793 in 2013, to 698 in 2014, 668 in 2015, and just 551 today. Because it's no longer produced, it's hard to say how much a new one might cost...but you can apparently buy a used MiG-21 on eBay for about 25 grand.
The MiG-21 still commands 4% market share. And if you count its "twins" -- the Chinese J-7s and F-7s -- there are 1,428 MiG-21 lookalikes in service, with a market share more than double that of the MiG-21 proper.
5. Mikoyan-Gurevich MiG-29 Fulcrum, list price: $40 million
Last year we mentioned that a new variant of the Mig-29, dubbed the MiG-35D, was slated to enter service in 2016, giving a new lease on life -- and increased marketshare -- to the Moscow warbird. That has now happened, and the world's most advanced MiG has enjoyed a market share boost to 6% (819 planes) as a result.
4. Boeing F-15 Eagle, list price: $100 million
Losing more and more international fighter jet competitions through a combination of high cost and low stealth, Boeing's F-15 is down but not out. Last year, Boeing built 12 "F-15 Models" for its customers, helping to grow the plane's base to 858 aircraft and giving it a 6% market share.
3. Sukhoi Su-27 Flanker, list price: $18 million
Thanks to resurgent Russian military spending at home, and a declining ruble abroad (which makes it more competitive in foreign markets), the Su-27 Flanker remains Russia's most popular fighter jet -- and the third most popular fighter in the world. When you include its Su-30 variant, the Flanker fleet boasts 6% global market share, with 943 aircraft in service.
2. Boeing F-18 Hornet, list price: $92 million
While both Boeing's F-15 and its F/A-18 production lines are reported to be winding down, the Seattle planemaker continues to churn out F/A-18s at its St. Louis, Mo., factory at three times the rate at which it produces the less popular F-15. Boeing delivered 35 Hornet aircraft in 2015, helping to boost it to 7% market share today, with 1,047 planes in service.
1. Lockheed Martin F-16 Falcon, list price: $34 million
And last (first?), but not least, for the third year running, Lockheed Martin's modestly priced F-16 Falcon tops the rankings in this year's edition of Flightglobal's "World Air Forces 2016" report. With 2,264 planes in active service, the F-16 is still the most popular fighter jet on the planet, making up 16% of the world's air forces.
Why investors care about fighter jets
Why is this important to investors in the defense industry? It works like this: The more planes a company sells, the broader the base over which it can spread R&D costs, and the less it needs to charge per plane.
The lower the cost, the cheaper the plane.
And the cheaper the plane, the easier it is to sell more planes, growing market share further. Thus the effect snowballs.
Lockheed Martin has sold more than 4,500 F-16s around the world. That's not surprising, because it's one of the most cost-effective warplanes in our inventory, costing just $21,450 per flight hour. By comparison, Lockheed's new F-35 Lightning II stealth jet costs $67,549 per flight hour, according to U.S. Air Force official documents.
Half of Lockheed's F-16s are still flying and generating services, maintenance, and upgrades revenue for Lockheed -- and, according to data from S&P Global Market Intelligence, they're earning Lockheed's shareholders nearly 11% profit margins on this revenue. Meanwhile, the aircraft Lockheed hopes will become the F-16's successor, the F-35 stealth fighter jet, costs three times as much as an F-16 -- both to buy and to fly (and certain versions of the F-35 could cost even more).
This raises the question: Can Lockheed Martin maintain its global market share dominance as it switches from selling low-cost F-16s to high-priced F-35s? Can it do so in the face of much cheaper fighter jet offerings from Russia and China?
So far, Lockheed appears to be making good progress. Recently, the U.S. Air Force inked a deal with Lockheed pricing new F-35 planes at less than $100 million each (engines not included). But if Lockheed Martin hopes to retain its place atop this list in the years to come, it needs to make continual progress in driving the F-35's cost down and its sales volumes up.