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.
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.
The F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th.— Donald J. Trump (@realDonaldTrump) December 12, 2016
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.