• The US Navy is grappling with shipbuilding and maintenance issues and faces a rising China.
• The Middle East conflicts have raised concerns about the Navy's readiness for a war against Beijing.
• A top admiral outlined to BI how the US is preparing for a possible fight.

Bogged down by shipbuilding struggles and maintenance woes, the US Navy faces an uphill battle to get its fleet ready for the next high-end conflict, which could be against China and its rapidly modernizing military.

Adm. James Kilby, the acting chief of naval operations, outlined for Business Insider how the US plans to maintain its edge and fix long-standing readiness problems.

"The Navy is committed to maintaining a ready fleet," Kilby said, explaining that the Navy is working to increase its ship readiness by improving the maintenance processes and reducing delays, increasing the procurement of spare parts, and taking a "focused and deliberate" approach to "manning, training, modernization, and sustainment."

Kilby said that the "goal is to achieve and sustain an 80% combat-surge ready posture by 2027," the year that China's military is expected to be ready to fight a war over Taiwan. Such a war could quickly become a conflict in the Western Pacific, drawing in American and allied militaries against China. Naval forces would have a critical part to play in that fight.

The acting CNO said in April that the Navy's average combat-surge readiness was about 68%.

Last September, then-Chief of Naval Operations Adm. Lisa Franchetti released a plan to increase readiness by 2027, which included a focus on streamlining warship maintenance to eliminate delays, pushing to integrate drones into fleet operations, and retaining personnel to prevent the loss of valuable workforce experience that can be difficult to replace.

"To increase our combat surge readiness," Kilby explained, "we are reducing the number of platforms in depot maintenance through improved business and maintenance practices, as well as certifying training earlier in the force-generation cycle."

The Navy's issues are centered on strained public yards, tremendous maintenance backlogs for combat ships, and stresses on the American shipbuilding industry, hollowed out in the years since the end of the Cold War. Rising costs, deferred maintenance for aging hulls, staffing shortfalls, and industrial and supply chain limitations have created a situation where existing ships aren't being adequately maintained and new ones aren't coming fast enough.

China has the largest navy in the world, and it is building new warships at a faster pace than the US. A larger force size and stronger industry could allow Beijing to endure more losses than Washington in a major conflict between the two adversaries.

US Navy readiness for a Pacific conflict has been a heightened concern since the US became heavily involved in the Middle East conflicts. Aircraft carriers and warships have rotated in and out of the region since the fall of 2023 for near-constant operations focused on threats from Iran and Tehran-backed Houthi rebels in Yemen.

For instance, during Israel's brief war against Iran last month, the Navy positioned two carrier strike groups in the Middle East and moved several other warships capable of ballistic missile defense into the Eastern Mediterranean Sea — putting an immense amount of firepower around the region.

These operations have resulted in extended deployments for aircraft carriers and their crews and have depleted critical missile interceptors that would be needed in substantial quantities for a war against China.

The Middle East conflicts have put a strain on the Navy. Some analysts argue that these fights offer only a glimpse of the kind of high-intensity combat operations that the sea service would potentially face in a Pacific fight.

"While the Navy must respond to today's crises, it cannot do so at the expense of future readiness," Kilby said.

He added that "we must exercise strategic discipline of the use of our forces, while increasing the surge readiness of our Navy without sacrificing scheduled maintenance so that the fleet stands ready for high-end conflict with China."

• Since last year, US warships have repeatedly fired SM-3 interceptors to defend Israel from Iranian missiles.
• A top Navy admiral told lawmakers Tuesday that the SM-3s have been depleted at an "alarming rate."
• These are assets the US would need in a high-end fight.

US Navy warships are burning through one of the top ballistic missile interceptors at an "alarming rate," the admiral overseeing naval operations told lawmakers on Tuesday.

During a Senate Appropriations Committee hearing, Hawaii Sen. Brian Schatz said US forces have expended large amounts of munitions to defend Israel from Iranian strikes during the latest round of conflict in the Middle East and asked whether the Navy has all the Standard Missile-3 interceptors that it needs to be ready for other global threats.

Adm. James Kilby, acting chief of naval operations, said that the service does have a sufficient supply of interceptors, but, he said, "we are, to your point, using them at an alarming rate."

"As you know, those are missiles procured by the Missile Defense Agency and then delivered to the Navy for our use," he added. "And we are using them quite effectively in the defense of Israel."

The SM-3 is a missile interceptor that uses a kinetic kill vehicle to destroy short- to intermediate-range missiles during the mid-course phase of flight. It is part of the Navy's highly advanced Aegis Combat System, equipped on Arleigh Burke-class destroyers and Ticonderoga-class cruisers.

Unlike the Navy's other missile interceptors, the SM-3 can engage targets in space.

The SM-3 missile comes in multiple variants, which can cost as much as $10 million on the low end and almost $30 million on the high end, according to the MDA. The weapon is made by US defense contractor RTX and, for the newest variant, Mitsubishi Heavy Industries.

The Navy first used the SM-3 interceptor in combat to defend Israel from Iran's unprecedented missile and drone attack in April 2024. American warships then fired the interceptors again several months later, in October, when Tehran launched over 180 ballistic missiles at Israel.

A US official told Business Insider last week that Navy warships in the eastern part of the Mediterranean Sea had launched missile interceptors to defend Israel from Iranian attacks amid the latest round of fighting between the two enemies. The official, however, did not specify what type of interceptors.

It is unclear how many SM-3s might have been launched as part of these efforts, and it is also unclear whether there were any confirmed interceptions of Iran's missiles in the latest engagements. The Pentagon did not immediately respond to BI's request for additional information.

Navy leadership has previously stated that it needs a lot more SM-3s to counter higher-level threats in the Pacific, like China and its large arsenal of ballistic missiles. Analysts, however, have raised concerns that the sea service is rapidly expending these interceptors in Middle East conflicts without sufficient plans to replace them.

The fiscal year 2025 defense budget request cut procurement of SM-3 Block IB interceptors from around 150 to zero over the next five years, and only called for production of a dozen of the newer SM-3 Block IIA variants every year for the same period.

The defense appropriation bill reversed some of those plans, providing additional funding for more SM-3 production. In May, the Pentagon awarded a substantial contract to RTX for dozens of SM-3 IBs. And there's also been further support aimed at boosting production of newer SM-3 variants. The outlook for the coming fiscal year isn't totally clear, but the emphasis on missile defense could reflect a favorable environment for increasing SM-3 interceptor stockpiles.

• A US Navy aircraft carrier deployed to the Red Sea lost a $60 million fighter jet on Monday.
• The aircraft fell overboard after a move crew "lost control" of the jet, the Navy said.
• It's the second time that the USS Harry S. Truman strike group has lost an F/A-18 Super Hornet.

An F/A-18 Super Hornet fighter jet fell off the USS Harry S. Truman on Monday while the aircraft carrier was operating in the Red Sea, leaving a sailor hurt, the US Navy said.

The F/A-18E, which is estimated to cost roughly $60 million, was actively under tow in Truman's hangar bay — an area underneath the flight deck where aircraft receive maintenance — when the move crew "lost control" of the fighter aircraft. The plane then fell overboard alongside the tow tractor.

"Sailors towing the aircraft took immediate action to move clear of the aircraft before it fell overboard," the Navy said, adding in a statement that one sailor received minor injuries and an investigation is underway.

"The Harry S. Truman Carrier Strike Group and embarked air wing remain fully mission capable," the Navy said.

The Truman is one of two US Navy aircraft carriers that are launching aircraft for daily strikes against the Iran-backed Houthis in Yemen. The US military began an intense bombing campaign against the rebels on March 15 and has struck hundreds of targets in the weeks since.

Earlier on Monday, the Houthis said they launched missiles and drones at the Truman and the warships in its strike group, claiming that the attack forced the carrier to turn around. Business Insider could not immediately verify these details.

A defense official told BI that "very few details can be provided currently as the incident is under investigation," adding that the crew is safe and accounted for.

The loss of a Super Hornet this week marks the second time during its involvement in the Red Sea conflict that the Truman strike group has lost one of the air wing's F/A-18.

In late December, the guided-missile cruiser USS Gettysburg accidentally shot a Super Hornet down in what the military described as "an apparent case of friendly fire."