Lockheed Martin Corp has been awarded USD 7 billion to provide another 114 F-35 Joint Strike Fighters to the US Air Force, the US Navy, the US Marine Corps, and the governments of Norway, Australia, and Italy. So the deal not only updates an earlier procurement contract but also covers other considerations for the Defense Department along with other foreign customers. This is reportedly a token contract before finalising a much larger contract to buy over 470 fighter jets that are supposed to be delivered for delivery between 2020 and 2022. The handshake agreement between Lockheed Martin and the Defense Department was sealed in June. This would lower the price of F-35 Joint Strike Fighters to less than USD 80 million. This is about 15 per cent lower than the real price of the aircraft.
Of the 114 aircraft that will be delivered under the agreement, 48 are F-35As for the US Air Force; 20 are Marine Corps F-35Bs, and nine will be Navy F-35Cs. The US will get 77 total fighter jets, while 15 F-35As will be delivered to Australia, 12 F-35As will be handed over to Norway, and eight F-35As along with two F-35Bs will go to Italy. Under the contract, Lockheed Martin will provide parts of the fighter jets that have become rarely available. The contract also covers the supply of software data, engineering services, safety items, and others. Lockheed will partner with BAE Systems and Northrop Grumman on the bulk of the work.
Meanwhile, Lockheed shares rose as much as 1.3 per cent to USD 375.45 after reports emerged that the so-called block buy agreement has concluded. The company’s stock had advanced 42 per cent this year through Friday. However, officials say that the production decision would be delayed as much as 13 months. The F-35 fighter jets have seen years of delays which have ultimately resulted in cost overruns. The long-term expenditure of operating and supporting the fleet of F-35 fighter jets over more than six decades has increased to USD 1.196 trillion.