Spread over three tranches starting from 2018, the multi-year deal will see the jets being sold to Australia, Denmark, Israel, Italy, Japan, the Netherlands, Norway, Turkey, South Korea, Britain and the United States.
The price of the A model is then expected to drop to $80 million by the end of 2020. That would mark the lowest price ever paid for an F-35, making this deal an important step in reducing the overall cost of each jet.
Noteworthy recently revised estimates indicate the U.S. Defence Department expects to spend $379 billion, down from $391 billion, to develop and buy 2,443 of the supersonic warplanes through 2039, people familiar with the talks told Reuters.
“This is part of an ongoing process. If it gets done, it would be a plus for Lockheed, allowing for better long-term production management,” said Robert Stallard, an analyst at Vertical Research.
In February, the Pentagon agreed to a deal for the tenth batch of the fighter aircraft and agreed to pay below $95 million per jet for the first time, compared with $102 million in the previous purchase which was the lowest price up until that point.
Actually the F-35 business accounts for about 37 percent of Lockheed’s total revenue. During the first quarter, Lockheed’s revenue from its aeronautics business increased 8 percent to $4.1 billion, led by higher sales of the F-35.
Moreover Lockheed executives have estimated that a multi-year deal will save about $2 billion for the nations that choose to participate in the multi-year purchase.
Lockheed Martin, the prime contractor, and its partners, including Northrop Grumman, Pratt & Whitney and BAE Systems, have been working on building a more cost-effective supply chain to fuel the production line in Fort Worth, Texas.
As we have already explained the F-35 which is the result of the JSF program, has been originally designed to replace aging fighter inventories including U.S. Air Force F-16s and A-10s, U.S. Navy F/A-18s, U.S. Marine Corps AV-8B Harriers and F/A-18s, and U.K. Tornados, Harrier GR.7s and Sea Harriers. Three Joint Strike Fighter variants have been developed to fulfill this difficult task: the F-35A conventional takeoff and landing (CTOL) variant, the F-35B short take-off and vertical-landing (STOVL) variant, and the F-35C carrier-based Catapult Assisted Take-Off But Arrested Recovery (CATOBAR) variant.
Photo credit: Senior Airman Justine Rho and Senior Airman Christine Groening / U.S. Air Force
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