F-35 price reductions locked in ahead of schedule
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The F-35 Joint Program Office and Lockheed Martin have finalised a $34 billion agreement for the production and delivery of 478 F-35s at the lowest aircraft price in the history of the program.
FILE PHOTO (July 2019): An F-35A Joint Strike Fighter from No.3 Squadron at RAAF Base Richmond. Photo by Sergeant Christopher Dickson.
This contract includes all US, international partners and foreign military sales aircraft in Lots 12, 13 and 14.
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 per cent reduction from Lot 11 costs for the conventional landing variant, as flown by the Royal Australian Air Force.
F-35 Program Executive Officer US Air Force Lieutenant General Eric Fick said driving down cost was critical to the success of the F-35 Program.
“I am excited that the F-35 Joint Program Office and Lockheed Martin have agreed on this landmark three-lot deal,” Lieutenant General Fick said.
“This $34 billion agreement is a truly historic milestone for the F-35 Enterprise.”
The agreement includes 291 aircraft for the US Services, 127 for F-35 International Partners, and 60 for F-35 Foreign Military Sales customers.
Price details include:
| Variant | Lot 12 | Lot 13 | Lot 14 | % Reduction from Lot 11* |
| F-35A | $82.4M | $79.2M | $77.9M | 12.8% |
| F-35B | $108.0M | $104.8M | $101.3M | 12.3% |
| F-35C | $103.1 | $98.1M | $94.4M | 13.2% |
*Final prices for F-35 variants following adjustments for Congressional plus-ups and other contractual settlements are: F-35A = $89.3M; F-35B = $115.5M; and F-35C = $108.8M.
Lockheed Martin, F-35 Program vice president and general manager Greg Ulmer said that with smart acquisition strategies, strong government/industry partnership and a relentless focus on quality and cost reduction, the F-35 Enterprise had successfully reduced procurement costs of the 5th Generation F-35 to equal or less than 4th Generation legacy aircraft.
“With the F-35A unit cost now below $80 million in Lot 13, we were able to exceed our long-standing cost reduction commitment one year earlier than planned,” Mr Ulmer said.
“The sub $80 million unit recurring flyaway cost for an F-35 represents an integrated acquisition price for the 5th Generation Weapon System.
“With embedded sensors and targeting pods, this F-35 unit price includes items that add additional procurement and sustainment costs to legacy 4th generation aircraft.”
Program Progress
More than 450 aircraft are now operating from 19 bases around the world.
Eight nations have F-35s operating from a base on their home soil and seven Services have declared Initial Operating Capability.
More than 910 pilots and 8350 maintainers have been trained.
The F-35 fleet has surpassed more than 220,000 flight hours.
The F-35 Program supports more than 220,000 direct and indirect jobs in the US and more than 100 international suppliers create or sustain thousands of jobs internationally, including in Australia.
So far 50 Australian companies have shared in more than AUD$1.69 billion in F-35 work, employing more than 2400 Australian workers.
Quickstep in Bankstown, Sydney, for example, currently supplies about US$250,000 worth of equipment to every F-35 globally, and recently won a contract to supply 10 new composite parts in support of the JSF Program.
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