April 20, 2021

Lockheed Martin about to close $37bn+ deal for F-35 jets

The contract will be the biggest yet for the F-35 jets and will consist of three tranches over fiscal years 2018-2020.

According to people familiar with the talks, the pricing of the jets is not final, although the average price of the 440 jets was expected to be $85 million each.

Touted as the fifth-generation fighter jet with a modular design, the F-35 comes in three variants.

U.S. President-elect Donald Trump © Shannon StapletonLockheed CEO promises cheaper F-35 1,800 jobs after meeting with Trump

The average price for the F-35 “A” variant could be $85 million in 2019 and could drop below $80 million in 2020, the sources said.

A Lockheed representative said the company does not discuss negotiations on contracts and any deal involving a “block buy” would be announced by the US government.

One of the sources told Reuters the US Defense Department expects to spend $379 billion, down from $391 billion, to develop and buy 2,443 of the supersonic warplanes through 2039.

“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.

The F-35 program has been widely criticized for being too expensive, including by US President Donald Trump who tweeted in December the cost was “out of control.” A month later Lockheed Martin CEO Marillyn Hewson met with Trump projecting “thousands and thousands of jobs” at the Lockheed plant in Texas, where the F-35 is built, and cheaper costs.

In February, the Pentagon agreed to a deal for a tenth batch of fighter aircraft and to pay below $95 million per jet for the first time, compared with $102 million in the previous purchase.

The Pentagon said the price of a jet could fall 16 percent to around $80 million in future purchases.

Article source: https://www.rt.com/business/393015-lockheed-deal-jets-sale/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

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