The US Department of Defense and Lockheed Martin have reached an agreement in principle on reducing the cost of the next lot of F-35 Lightning II aircraft to below US$100 million.
The Low-Rate Initial Production Lot 10 (LRIP-10) contract covers acquisition for 90 F-35s and represents more than a 60 per cent price reduction for the F-35A variant since the first LRIP-1 contract, according to the official Joint Program Office (JPO) release. The monetary savings amount to US$728 million compared to the previous Lot.
“We continue to work with Industry to drive costs out of the program.”
“The LRIP-10 contract is a good and fair deal for the taxpayers, the US Government, allies, and Industry,” Lieutenant General Chris Bogdan, F-35 program executive officer said. “We continue to work with Industry to drive costs out of the program.”
The F-35A variant being acquired by the RAAF comprises approximately 85 per cent of the program of record. Its unit price in LRIP-10, including aircraft, engine and fee, is roughly seven per cent lower than the previous LRIP-9 contract. Over the past two procurement lots (LRIP-9 and 10), the price of the F-35A has dropped 12 per cent.
“With initiatives like Blueprint for Affordability and the natural learning curve, we are substantially bringing the cost of each aircraft down and at the same time the F-35 program will continue to add thousands of additional jobs to the US economy as we increase production year over year,” Lockheed Martin F-35 vice president and general manager Jeff Babione said.
LRIP 10 contract includes 55 jets for the US services and 35 jets for international partners and foreign military sales customers:
- 44 F-35A for the U.S. Air Force
- 9 F-35B for the U.S. Marine Corps
- 2 F-35C for the U.S. Navy
- 3 F-35B for UK
- 6 F-35A for Norway
- 8 F-35A for Australia
- 2 F-35A for Turkey
- 4 F-35A for Japan
- 6 F-35A for Israel
- 6 F-35A for South Korea
The approximate per variant unit price for the F-35A, including jet, engine and fee will be US$94.6 million.
Lockheed Martin said in a statement that “the increase in the number of aircraft in this agreement enables us to reduce costs by taking advantage of economies of scale and production efficiencies”.
The company attributed “President Trump’s personal involvement in the F-35 program” as a factor in accelerating the negotiations and “[sharpening] our focus on driving down the price”.