Pentagon to build 375 F-35 fighter jets over next three years

Deal between US Defence Department and Lockheed Martin is worth about $30bn

The US Department of Defence agreed with Lockheed Martin to build about 375 F-35 fighter jets over three years. This Pentagon-supplied photo shows a US Air Force F-35 Lightning II being refuelled over Poland in February 2022.

A Lockheed Martin F-35 Lightning jet at the ILA Berlin Air Show 2022 in Schoenefeld, Germany, 22 June 2022. EPA

A Lockheed Martin F-35C Joint Strike Fighter is shown on the deck of the USS Nimitz aircraft carrier. Reuters

An Israeli Air Force F-35 Lightning II fighter jet performing at the Hatzerim base in the Negev desert, near the southern city of Beer Sheva, Israel. AFP

A US F-35 fighter jet flies over the Eifel Mountains near Spangdahlem, Germany on February 23, 2022. AP

F-35C Lightning IIs on a test flight in the Atlantic test range. The programme is now the most expensive in US military history. Lockheed has pledged to cut costs. AFP

Lockheed Martin's F-35 helped the company boost profit in the first quarter. Reuters

Manufactured by Lockheed Martin, the F-35 is America's next-generation stealth fighter jet. Reuters

Three F-35A Lightning IIs assigned to the 4th Expeditionary Fighter Squadron taxi after landing at Al Dhafra Air Base, UAE. Photo: US Air Force

A Lockheed Martin F-35A fighter jet on a training mission in Hill Air Force Base, Utah. Bloomberg

An RAF F-35B Lightning 11 supersonic stealth strike fighter, built by the US plane maker Lockheed Martin, touches down in the UK. Getty

An F-35 Lightning II, built by Lockheed Martin, at the Joint Reserve Base, Fort Worth, Texas. AFP

A US F-35A stealth fighter jet at an unspecified location. EPA

A formation of US Air Force F-35 Lightning II fighter jets perform aerial maneuvers during as part of a combat power exercise. Reuters

A US F-35A fighter jet prepares to land at Chungju Air Base in Chungju, South Korea. AP

The US Department of Defence agreed with Lockheed Martin Corp to build about 375 F-35 fighter jets over three years, the two parties said.

The agreement came amid expectations that the price of the most common version of the aircraft would increase because of inflation and slower production.

“We are pleased to announce that the department and Lockheed Martin reached a handshake agreement for the next F-35 lot buy on a basis of 375 aircraft,” said William LaPlante, the Pentagon's chief weapons buyer.

Earlier on Monday, Reuters reported the deal, worth about $30 billion, was nearing an agreement.

The agreement came as the aviation industry gathered for the return of the Farnborough Airshow, aiming for a display of confidence after the Covid-19 pandemic.

But the only records likely to be broken at the event in south-east England are for sweltering temperatures.

The "handshake" agreement is a starting point for finalising contract prices and award, which will probably not be locked in for weeks, if not months.

So the ultimate value of the deal, and the price for each jet variant, is still uncertain.

The most common version is the F-35A, which flies conventionally from runways.

The first aircraft of that version cost $221 million when it came off the production line in 2007.

Since then, production quantities and know-how have increased, helping the price of the stealthy fifth-generation fighter to fall to $79m each as it has gained buyers.

The Pentagon said the aircraft quantity in this agreement might change based on any “adjustments made by the US Congress in the Fiscal Year 2023 budget and any orders requested by international partners".

Lockheed said that “in the midst of continued Covid-19 impacts and decreased F-35 quantities, the F-35 enterprise was able to achieve a cost per jet lower than record-breaking inflation trends”.

Last week US data showed inflation had accelerated to an annual rate of 9.1 per cent in June.

Amid the pandemic, Lockheed began to foreshadow that the price of the jet could rise as economies of scale diminished and supply chains were blocked.

An earlier Pentagon three-year “block buy", signed in 2019, was for 478 F-35 fighter jets, allowing Lockheed to buy larger amounts of parts to reduce costs by about 8 per cent, to $34bn, compared with negotiating annual contracts.

The F-35 has had several recent successes in jet fighter competitions, including Finland, Switzerland and Germany. Potential customers include Greece and the Czech Republic.

The UAE in December announced it was suspending discussions with the US government to acquire F-35 fighter jets over “sovereignty operational restrictions".