Lockheed Martin reduces F-35 price in new production contract

Lockheed Martin reduces F-35 price in new production contract

F-35A aircraft now below $90 million, a 5.4% reduction from previous production lot.

October 3, 2018
Edited by Eric Brothers

The U.S. Department of Defense and Lockheed Martin have finalized an $11.5 billion contract for the production and delivery of 141 F-35 aircraft at the lowest per aircraft price in the program’s history.

The cost of an F-35A was lowered for the 11th consecutive year. Unit price for the F-35A including aircraft, engine, and fee is $89.2 million. This represents a 5.4% reduction from the $94.3 million it cost for an F-35A in low-rate initial production lot 10 (LRIP 10).

In LRIP 11, the F-35B unit cost was lowered to $115.5 million – a 5.7% reduction from the $122.4 million it cost for the short-takeoff and landing variant in LRIP 10. The F-35C unit cost was lowered to $107.7 million, an 11.1% reduction from the $121.2 million it cost for the carrier variant in LRIP 10.

The LRIP 11 agreement funds 91 aircraft for the U.S. services, 28 for F-35 international partners, and 22 for F-35 foreign military sales customers. Deliveries will begin in 2019.

“Driving down cost is critical to the success of this program,” said Vice Admiral Mat Winter, F-35 Program Executive Officer. “We are delivering on our commitment to get the best price for taxpayers and warfighters. This agreement for the next lot of F-35s represents a fair deal for the U.S. government, our international partnership, and industry. We remain focused on aggressively reducing F-35 cost and delivering best value.”

The latest contract is a demonstration of the program’s progress and maturity, as industry and the government now set their sights on future acquisition approaches for the next three production lots to further reduce costs.

“This agreement marks a significant step forward for the F-35 program as we continue to increase production, reduce costs, and deliver transformational capabilities to our men and women in uniform,” said Greg Ulmer, F-35 vice president and general manager. “As production ramps up, and we implement additional cost savings initiatives, we are on track to reduce the cost of the F-35A to $80 million by 2020, which is equal to or less than legacy aircraft, while providing a major leap in capability.”

More than 320 F-35 aircraft operate from 15 bases around the globe. More than 680 pilots and 6,200 maintainers have been trained, and the F-35 fleet has surpassed more than 155,000 cumulative flight hours.

The F-35 is built by thousands of men and women in America and around the world. With more than 1,500 suppliers in 46 states and Puerto Rico, the F-35 program supports more than 194,000 direct and indirect jobs in the U.S. alone. The program also includes more than 100 international suppliers, creating or sustaining thousands of international jobs.