New F-35 Cost Target Slips Toward Goal

By Amy Butler
Source: Aviation Week & Space Technology
August 05, 2013
Credit: Lockheed Martin

The Pentagon and Lockheed Martin have agreed to a handshake deal for the latest two lots of F-35 airframes, and based on cost projections the program for the first time is targeting a unit price under $100 million, excluding engines and retrofits.

But this goal in the seventh production run (next year) covers only the airframe. A breakdown of additional prices such as the F135 engine and projected retrofits reveals a far higher cost. Meanwhile, the Pentagon is preparing to consider whether the single-engine, stealthy aircraft is ready for full-rate production, as officials target a total unit cost at peak production of $80-90 million.

The deal covers 36 aircraft in low-rate, initial production (LRIP) 6 and another 35 in LRIP 7. Defense spending cuts handed down by sequestration in the fiscal 2013 budget did not ultimately affect the number of aircraft in LRIP 6, as once thought.

The total contract and per-unit price figures will not be released until the contract is signed, says Michael Rein, a Lockheed Martin spokesman.

However, the company says the unit cost of each variant will be reduced by about 4% lot over lot. Based on pricing targets for LRIP 5, per-unit goals can be projected for the new LRIP 6 and 7 jets.

The F-35A airframe, designed for conventional U.S. Air Force takeoff and landing (and the version with greatest appeal to international partners) is projected to cost $100.8 million in LRIP 6 and $96.8 million in LRIP 7. This is the first time since the program began production that the projected unit cost will fall below $100 million.

These prices do not include engines; the government contracts separately with Pratt & Whitney to purchase the F135. Pratt will not release its unit price, but a defense official says each F-35A engine costs roughly $14 million, and each F-35B engine is about $38 million. Pratt and the Pentagon are still negotiating terms for LRIP 6 engines, a company spokesman says.

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