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US reaches deal with Lockheed Martin to construct 375 F-35s

The US Department of Defence made a handshake agreement with Lockheed Martin for the procurement of 375 F-35 fighter jets in three years’ time, the two parties said on Monday, amid expectations the price of the most common version of the aircraft would increase due to inflation and slower production.

“We are pleased to announce that the Department and Lockheed Martin reached a handshake agreement for the next F-35 lot buy on a basis of 375 aircraft,” said William LaPlante, the Pentagon’s chief weapons buyer.

Worth around USD 30 bn, the deal came in the forerun to the return of the Farnborough Airshow, aiming for a display of confidence to balance out the doldrums experienced by the aviation industry during the pandemic. As reported by Reuters, the only records likely to be broken at the event in southeastern England are for sweltering temperatures.

With the “handshake” done, the way is paved for final touches, contract pricing and award to follow. The pricing is expected to remain unlocked for several weeks if not months, meaning the ultimate value of the deal is yet to be set in stone.

The F-35A, which takes off conventionally from runways, is the most common version of the mark, which also boasts other variants like the short takeoff and vertical landing (STOVL) F-35B or the F-35C, which features larger wings with foldable wingtip sections, larger control surfaces for improved low-speed control, stronger landing gear for the stresses of carrier arrested landings, a twin-wheel nose gear, and a stronger tailhook for use with carrier arrestor cables.

The first aircraft of the standard F-35A version cost USD 221 mln when it came off the production line in 2007. Production quantities and know-how have increased since the aircraft’s debut, helping the price of the stealthy fifth-generation fighter fall to USD 79 mln each as it has gained buyers.

But as regards the final quantity in the agreement clenched on Monday, the Pentagon said it might change based on any “adjustments made by the US Congress in the Fiscal Year 2023 budget and any orders requested by international partners.”

The Pentagon’s “block buy”

For its part, Lockheed said in a statement that “in the midst of continued COVID-19 impacts and decreased F-35 quantities, the F-35 enterprise was able to achieve a cost per jet lower than record-breaking inflation trends.”

Last week US data showed inflation had increased to an annual rate of 9.1 percent in June.

In the dark of the pandemic, Lockheed began to predict a price rise for the jet owing to the diminishing economies of scale and the stumbling of supply chains.

The previous three-year “block buy,” signed by the Pentagon in 2019, was for 478 F-35 fighter jets, allowing Lockheed to purchase larger quantities of components to reduce costs by about 8 percent, to USD 34 bn, versus negotiating annual contracts.

The F-35 has been on a winning streak in jet fighter competitions that took place in Finland, Switzerland and Germany. Now Greece and the Czech Republic are likely to turn to Lockheed Martin for the procurement of the fighter jet that US Air Force Lt General Mike Schmidt, Program Executive Officer at the F-35 Joint Programme Office described as “one of the most lethal, interoperable, and scalable capabilities in the DoD inventory.


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