Fighter Jet Price Hits Record Low in Massive Deal

The price of the U.S. Defense Department’s controversial stealth fighter jet reached a record low in a huge deal announced a day ahead of the world’s largest civil and military air show, held in the United Kingdom.

The United States and Lockheed Martin inked the agreement Sunday for 141 F-35 fighter jets — to be delivered to the branches of the U.S. military, international partners, and foreign military sales customers, according to both sides.

Lockheed declined to release exact numbers for the deal and unit price until the contract is finalized, but Reuters reported that the cost of one U.S. Air Force F-35A in the agreement was $89 million. That reflects a drop of 6 percent since a deal was struck for the last batch in February 2017.

The agreement marks an important step toward reaching the goal of reducing the cost of an F-35A to $80 million by 2020, on par with the price of legacy fighter jets like the U.S. Navy’s F/A-18.

“We have a handshake agreement which symbolizes the Department of Defense’s commitment to not only equip our warfighters with the world’s greatest 5th generation aircraft, but it also represents great value to the U.S. taxpayers, our allies and international partners,” said Ellen Lord, the Pentagon’s top acquisition official, in a statement to Foreign Policy ahead of the Farnborough Airshow, which begins Monday.

The F-35 is the United States’ costliest weapons program and has faced harsh criticism over schedule delays, cost overruns, and technical challenges over its decadeslong development. Even President Donald Trump has criticized the F-35, blasting the program for “out of control” costs in a 2016 tweet that sent Lockheed stocks temporarily tumbling.

While the lower price tag addresses some of that criticism, the Defense Department and Lockheed Martin are also facing mounting pressure to reduce the long-term cost to operate and maintain the new aircraft over the course of its projected 60-year life span. For the thousands of F-35s that will eventually be in service, that aggregate maintenance cost is now pegged at over $1 trillion dollars.

Across the F-35 enterprise, operators are grappling with severe maintenance challenges, most critically a spare parts shortage and insufficient repair capacity, that are driving up the long-term cost of the fleet. These challenges are emerging at a pivotal time for the program, with pilot training ramping up, international deliveries accelerating, and a global fleet that is expected to triple by 2021.

Across the fleet, the proportion of time the F-35 is available for operations — or its “availability rate” — is just 51 percent on average, although the reliability of the newer aircraft is considerably higher than the old jets, according to a report by the Government Accountability Office (GAO). Further, for much of 2017 F-35s were unable to fly because they were awaiting parts on average about 22 percent of the time, according to GAO.

At the 33rd Fighter Wing at Eglin Air Force Base in Florida, one of the Air Force’s F-35 training hubs, a severe backlog in spare parts is threatening to delay graduating pilots, Republican Rep. Matt Gaetz of Florida said on Capitol Hill earlier this year. Meanwhile, the availability rate at the U.S. Marine Corps’s operational F-35 squadron based at Iwakuni, Japan, is in the mid-50 percent range, Lt. Gen. Steven Rudder, deputy commandant for aviation, said during a March hearing. 

GAO also found that the establishment of repair capabilities at the military depots is six years behind schedule, making it hard to repair components “in a timely manner” across the enterprise. 

Despite these obstacles, the Pentagon and Lockheed are working to reduce the long-term cost of the jet. The Defense Department is accelerating the establishment of government repair facilities, according to Vice Adm. Mat Winter, who directs the F-35 Joint Program Office. And the office said it spent $1.4 billion last year to increase spare part purchases, build up repair capacity, and improve the speed of repairs.

“If you can afford to buy something but you have to keep it in the parking lot because you can’t afford to own and operate it, then it doesn’t do you much good,” Winter said at the hearing.