Lockheed Martin reduces F-35A cost by 12.8%

The Pentagon’s F-35 Joint Program Office and Lockheed Martin finalized a $34 billion agreement for the production and delivery of 478 F-35s at the lowest aircraft price of the program’s history. This contract includes all U.S., 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 less than $80 million in both Lot 13 and Lot 14, the F-35A unit cost represents an estimated overall 12.8% reduction from Lot 11 costs for the conventional landing variant, and an average of 12.7% savings across all three variants from Lot 11 to 14.

"Driving down cost is critical to the success of this program. I am excited that the F-35 Joint Program Office and Lockheed Martin have agreed on this landmark three-lot deal. This agreement achieves an average 12.7% cost reduction across all three variants and gets us below $80 million for a USAF F-35A by Lot 13 – one lot earlier than planned," said Air Force Lt. Gen. Eric Fick, F-35 Program Executive Officer.

"With smart acquisition strategies, strong government-industry partnership, and a relentless focus on quality and cost reduction, the F-35 enterprise has successfully reduced procurement costs of the 5th generation F-35 to equal or less than 4th generation legacy aircraft," said Greg Ulmer, Lockheed Martin, F-35 Program vice president and general manager.

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, the F-35 unit price includes items that add additional procurement and sustainment costs to legacy 4th generation aircraft.

The agreement includes 291 aircraft for the U.S. 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                          $103.1M         $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.

More than 450 aircraft are operating from 19 bases around the globe, with more than 910 pilots and 8,350 maintainers trained, and the F-35 fleet has surpassed more than 220,000 cumulative flight hours. Eight nations have F-35s operating from a base on their home soil and seven services have declared initial operating capability.

The F-35 is built by thousands of men and women in America and around the world. With more than 1,400 suppliers in 46 states and Puerto Rico, the F-35 program supports more than 220,000 direct and indirect jobs in the U.S. alone. The program also includes more than 100 international suppliers, creating or sustaining thousands of jobs.