Negotiations to finalize the contract for the next 160 F-35 Lightning II airframes are still not concluded, although a deal concluding the supply of their F135 engines was announced by the F-35 Joint Program Office (JPO) today. However, Lockheed Martin (LM) F-35 program general manager Jeff Babione told reporters attending a briefing at the Royal International Air Tattoo (RIAT) in the UK that the unit recurring flyaway cost (URFC) of the F-35A version is now heading below $100 million.

This will be the price paid by U.S. and international customers for jets delivered within Low Rate Initial Production (LRIP) Lot 10, he said. That lot is being negotiated together with LRIP Lot 9, a process that is taking much longer than predicted. Explaining the delay, Babione said that estimating the cost of building aircraft in two years’ time is complicated, and that there had also been “some changes along the way.” Lockheed Martin has been funding long-lead items for the aircraft itself; “We’re building them anyway,” he said.

The affordability of the F-35 has exercised budget planners in the Pentagon and caused some international customers (such as Denmark, Italy and the Netherlands) to significantly reduce their total planned buy. Babione said that LM’s target URFC for an F-35A produced in 2019 was $85 million, $5 million more than the previous predictions for full-rate production. There are no specific targets for the F-35B STOVL and F-35C carrier versions, he added. They are considerably more expensive.

According to Babione, the possibility of block buys to assure lower unit costs still exists. Advice from the Pentagon’s own weapons tester against concluding such a contract seems to have postponed any prospect of the U.S. services committing to this before Lot 13. However, the JPO was discussing a “hybrid block buy” from Lot 12 with some of the international partners, the LM manager said. Almost half of the F-35s planned to be built over the next five years are international, he noted. 

Pratt & Whitney received a second and final contract covering the production of 99 F135 engines for LRIP 10 worth $1.95 billion. Last April, the engine maker received a contract worth about $1.4 billion for the 66 engines in LRIP Lot 9. “The propulsion system team has kept its word in delivering on its price reduction commitments,” said Lt. Gen. Chris Bogdan, F-35 program executive officer. Pratt & Whitney said it has reduced the cost of the common F135s for F-35A/C models by half since 2009. Over the same time, the cost of the F-35B propulsion system (including the shaft-driven lift fan) had come down by 35 percent, it said.