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October 2, 2018

US DoD and Lockheed cut F-35 price under $11.5bn deal

The US Department of Defense (DoD) has awarded a contract worth $11.5bn to Lockheed Martin for the production and delivery of a total of 141 units of F-35 Lightning II joint strike fighter aircraft.

The US Department of Defense (DoD) has awarded an $11.5bn contract to Lockheed Martin for the production and delivery of a total of 141 units of F-35 Lightning II joint strike fighter aircraft.

The per unit price of the F-35 has been reduced for the 11th consecutive year, with the cost this year being the lowest in the history of the aircraft development programme.

With the cut, the cost of an F-35A aircraft in Low-Rate Initial Production Lot 11 (LRIP 11) has been quoted at $89.2m, including engine and fee, representing a 5.4% reduction from the $94.3m per unit cost in LRIP 10.

Similarly, the unit cost of F-35B short-take-off and landing variant has been reduced by 5.7% to $115.5m from $122.4m in the previous year.

“As production ramps up, and we implement additional cost savings initiatives, we are on track to reduce the cost of the F-35A to $80m by 2020, which is equal to or less than legacy aircraft.”

The F-35C unit cost in LRIP 11 was cut down by 11.1% to $107.7m from the $121.2m unit cost for the carrier in LRIP 10.

F-35 vice-president and general manager Greg Ulmer said: “This agreement marks a significant step forward for the F-35 programme as we continue to increase production, reduce costs and deliver transformational capabilities to our men and women in uniform.

“As production ramps up, and we implement additional cost savings initiatives, we are on track to reduce the cost of the F-35A to $80m by 2020, which is equal to or less than legacy aircraft, while providing a major leap in capability.”

The current production agreement involves the development and delivery of 91 F-35 jets for the US services, 28 for international partners and 22 for F-35 foreign military sales customers.

Deliveries of the aircraft under LRIP 11 are slated to be carried out by the company beginning next year.

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