Lockheed Martin
The F-35A conventional take-off and landing version of the Joint Strike Fighter will carry a unit cost of , $89.2 million in Lot 11 of the defense program.

Lockheed, DoD Agree on F-35 Price Cuts

Oct. 2, 2018
$11.5-billion deal lowers unit costs by 5-11% for Stealth fighter jets, with deliveries to start next year

The U.S. Dept. of Defense and Lockheed Martin Corp. have settled terms on the cost for the next series of F-35 Lightning II Joint Strike Fighter jets, following protracted negotiations and a preliminary deal reached in mid-summer. The agreement is worth a reported $11.5 billion, but cuts unit costs for all three models of the F-35, allowing the Pentagon and the program’s primary contractor to proceed with long-term purchase plans for the program.

The F-35 is a series of three, Stealth-enabled single-engine aircraft designed for ground attack and combat, and deployed by the U.S. Air Force, U.S. Navy, and U.S. Marine Corps, and the defense forces of multiple allied nations. The program has been under steady scrutiny and criticism for the high cost of individual aircraft, and Lockheed and other contractors have made steady efforts to contain the costs for future deliveries.

According to Lockheed’s statement, the deal for Lot 11 of the program covers production and delivery for 141 F-35, 91 of which will be delivered to the U.S. Air Force, U.S. Marine Corps, and U.S. Navy. A further 28 jets will be delivered to the program’s international partners, and 22 jets will be supplied for foreign military sales clients.

The deliveries from Lot 11 will begin in 2019.

"This agreement for the next lot of F-35s represents a fair deal for the U.S. Government, our international partnership and industry," according to Vice Admiral Mat Winter, F-35 program executive officer. "We remain focused on aggressively reducing F-35 cost and delivering best value."

Under the new deal, the unit cost for the F-35A (the conventional take-off and landing version), including aircraft, engine and fee, is $89.2 million. That is a 5.4% reduction from the Lot-10 unit price.

The cost for the F-35B (short take-off and vertical landing variant) was lowered 5.7% to $115.5 million.  The F-35C unit cost was lowered 11.1% to $107.7 million.

"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 Lockheed’s 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."

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