The Pentagon on Tuesday announced pricing details for its agreement with Lockheed Martin Co that lowers by 12.7% the cost of the F-35 jets it plans to purchase through 2022, which may encourage other nations to buy warplanes.
The F-35A, the most common version of the aircraft, will each cost $82.4 million in 2020, $79.17 million in 2021 and $77.9 million in 2022, the Pentagon told reporters at the Pentagon on Tuesday.
The US Department of Defense finalized an agreement to purchase 478 additional F-35 Lightning II airplanes from Lockheed Martin with each jet costing about $71.13 million, in a deal totaling $34 billion.
Ellen M. Lord, undersecretary of defense for acquisition and sustainment, announced yesterday’s agreement between DoD and aircraft manufacturer Lockheed Martin during a briefing today at the Pentagon.
Earlier this month, there were reports that hinted that South Korea was eyeing to buy 20 units of the F-35 fighter for $3.3 billion, meaning Seoul will purchase each jet for around $165 million. “The state-funded Korea Institute for Defense Analyses, or KIDA, has concluded a study on the additional acquisition of F-35 aircraft, and the study is to suggest the introduction of more F-35As be more feasible,” a source at the Ministry of National Defense told Defense News on the condition of anonymity.
In September 2019, the US State Department approved Poland’s request of buying 32 F-35A warplanes for $6.5 billion, with the price of each F-35 pegged at $203.13 million.
The Pentagon announced on October 28 that it awarded Lockheed $7 billion to supply 114 F-35s to the US, Australia, Norway, and Italy. “Lockheed Martin is awarded a $7 billion modification to a previously awarded contract. This modification provides for the procurement of 114 F-35 aircraft for Air Force, Marine Corps, and Navy; non-Department of Defense (DoD) participants, and Foreign Military Sales (FMS) customers. Specifically the modification procures 48 F-35A aircraft for the Air Force, 20 F-35B aircraft for the Marine Corps, nine F-35C aircraft for the Navy, 12 F-35A aircraft for the government of Norway, 15 F-35A aircraft for the government of Australia, and eight F-35A and two F-35B aircraft for the government of Italy,” the Pentagon said in a statement on Monday.
“The agreement involving Lot 12 includes 149 aircraft, Lot 13 includes 160 aircraft, and Lot 14 includes 169 aircraft,” said Lord, on Tuesday.
Air Force Lt. Gen. Eric T. Fick, the F-35 program executive officer, said those lots include 351 of the F-35A aircraft, which is the standard model used by the Air Force. There are also 86 of the F-35B aircraft, which is the vertical-takeoff model used by the Marine Corps, and 41 of the F-35C aircraft, which are for carrier-based operations.
Those aircraft are not all for the United States. Some of the planes are for partner nations, as well as nations that have purchased through foreign military sales.
Lord said acquisition and sustainment and the F-35 Joint Program Office are “laser-focused” on reducing costs for the aircraft, bringing up quality, and achieving timely deliveries.
“We will reach a unit recurring flyaway cost-per-aircraft target of $80 million for a US Air Force F-35A price, by Lot 13 — which is one lot earlier than planned,” she said. “A significant milestone for the department.”
Lord said that there’s a per-unit cost reduction for each variant of the aircraft that averages around 12.7% when comparing Lot 14 purchases to Lot 11 purchases. “These represent some of the largest achieved savings lot-over-lot for the program.”
“In the agreement, the F-35 Enterprise meets and exceeds its long-stated cost reduction targets for each variant – and the F-35A unit price, including aircraft and engine, is now below $80 million in both Lot 13 and Lot 14, the F-35A unit cost represents an estimated overall 12.8 percent reduction from Lot 11 costs for the conventional landing variant, and an average of 12.7 percent savings across all three variants from Lot 11 to 14,” Lockheed Martin said in a statement.
Fick said that the most recent contract award slows production of the F-35 from previous awards, giving a break to contractors involved in the aircraft’s manufacturer. The lot 12 purchase of 149 aircraft, for instance, is just slightly higher than the 141 aircraft in Lot 11.
“With this award, we see from a production perspective the most dramatic rate increases in the production line are now behind us,” Fick said. “This dramatic production rate increase has proven to be challenging for the supply chain, but the comparatively minor quantity changes across lots 12 through 14 should give it some breathing room as we move forward.”
He said that breathing room for manufacturers allows for more timely delivery of parts to the production line and spares and repair parts to the field.
Currently, some 440 F-35 aircraft have been delivered to military organizations around the world — including the United States, Norway, Israel, Italy, the United Kingdom, Australia, South Korea, and Japan.