Pentagon finalises F-35 LRIP 8 contract

Marina Malenic, Washington, DC - IHS Jane's Defence Weekly
23 November 2014


The F-35C's price has dropped by 0.1% to USD115.7 million. Source: Lockheed Martin
Key Points
The Pentagon has finalised a deal with Lockheed Martin for 43 F-35 airframes: 29 for the United States and 14 for international sales
The unit price of each of the three variants has come down steadily
The US Department of Defense (DoD) and Lockheed Martin finalised the eighth F-35 Lightning II Low-Rate Initial Production (LRIP 8) contract on 21 November, the DoD's programme office announced.

The deal is for 43 F-35 airframes valued at USD4.7 billion. The batch includes 29 aircraft for the United States and 14 for 5 other countries.

The US buy is for 19 F-35A conventional take-off and landing aircraft at USD94.8 million apiece; 6 F-35B short take-off and landing aircraft for USD102 million each; and four F-35C carrier variant aircraft at USD115.7 million per airframe. As previously reported by IHS Jane's and now confirmed by the Pentagon, those figures include price reductions to all three variants. The A-model's price was reduced by 3.6% from the previous lot, while the B-model's price was reduced by 1.7%, and the C-model's price was reduced by 0.1%.

The contract also provides for the production of the first two F-35As for Israel and the first four F-35As for Japan, along with two F-35As for Norway and two F-35As for Italy. The United Kingdom will receive four F-35Bs.

The engines are funded through a separate contract with Pratt & Whitney, a division of United Technologies. The LRIP 8 deal for 48 engines is worth USD1.05 billion, the DoD announced in October. The Pentagon's F-35 programme manager, Lieutenant General Christopher Bogdan, has said that the engine's cost has dropped 4.5% over the LRIP 7 cost.

Lockheed Martin is expected to begin delivering LRIP 8 aircraft in mid-2016. Once production of LRIP 8 aircraft is completed, more than 200 F-35s will be in operation by 8 nations, according to programme spokesman Joe DellaVedova.

As of November, 115 F-35s, including test aircraft, were delivered from Lockheed Martin's production facility in Fort Worth, Texas. The United States, eight Partner nations, and three Foreign Military Sales customers have said they intend to procure more than 3,200 F-35 aircraft over the life of the programme.

COMMENT
The airframe price has been reduced markedly over the past four years. The A, B, and C variants were priced at USD106 million, USD113 million, and USD126 million, respectively, in LRIP 5 in 2011, according to budget documents.Under increasing pressure from the Pentagon's programme manager, both prime contractors have pledged to redouble their efforts in a cost-reduction drive aimed at a unit cost for the aircraft of no more than USD80 million at its production peak.

IHS Janes