The Pentagon and Lockheed reach an agreement to build 375 F-35 fighter jets

by mike stone

WASHINGTON (Reuters) – The U.S. Department of Defense has reached an agreement with Lockheed Martin Corp to build around 375 F-35 fighter jets over three years, the two sides said on Monday, amid expectations that the price of the most common version of the plane would drop. increase due to lower amounts and inflation.

“We are pleased to announce that the Department and Lockheed Martin have reached a handshake agreement for the purchase of the next batch of F-35s based on 375 aircraft,” said William LaPlante, the Pentagon’s chief of arms purchases.

Earlier on Monday, Reuters reported that the deal, worth around $30 billion, was close to closing.

The “handshake” deal is a starting point to finalize pricing that likely won’t be set for several weeks, if not months, making the final value of the deal and each aircraft still uncertain.

The F-35A, the most common version of the jet, currently costs the United States around $79 million.

The Pentagon said the final number of planes may change based on any “adjustments made by the US Congress to the fiscal year 2023 budget and any requests requested by international partners.”

Lockheed said in a statement that “amid ongoing impacts from COVID-19 and declining F-35 numbers, the F-35 venture was able to achieve a cost per aircraft lower than record inflation trends.”

Last week, US data showed that inflation had accelerated to an annual rate of 9.1% in June.

An earlier three-year “block purchase” from the Pentagon, signed in 2019, was for 478 F-35 fighter jets, allowing Lockheed to buy larger quantities of components to cut costs by about 8%, to $34. billion, instead of negotiating annual contracts.

(Reporting by Mike Stone in Washington; Editing by Kim Coghill and Stephen Coates)

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