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LRIP 10 deal brings F-35A unit cost under US$100 million

written by australianaviation.com.au | February 6, 2017

12834779973_ac8c80a788_kThe US Department of Defense and F-35 Lightning II prime contractor Lockheed Martin have reached an agreement on the next lot of aircraft, LRIP 10, which includes eight F-35A jets for Australia.

This lot, which includes 90 aircraft in total, 55 jets for the US and 35 for partners and Foreign Military Sales (FMS) program customers, marks the first time that the price of the conventional takeoff and landing variant is below US$100 million.

At US$94.6 million, the F-35A unit price for LRIP 10, which includes the aircraft, engine and fee, is 7.3 per cent lower than under the LRIP 9 contract.

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“The LRIP 10 contract is a good and fair deal for the taxpayers, the US government, allies and industry,” said Lieutenant General Christopher Bogdan, F-35 program executive officer.

“We continue to work with industry to drive costs out of the program.”

Of the 90 jets to be delivered under LRIP 10 44 are F-35As for the US Air Force and nine are F-35Bs for the US Marine Corps and two are F-35Cs for the US Navy. Australia is the biggest international buyer in LRIP 10 with 35 in all 35 for international partner and FMS customers, including six jets each for Israel, Norway and South Korea (all F-35As), four F-35As for Japan, three F-35Bs for the UK and two F-35As for Turkey.

Over 200 F-35s are now in operational service with eight nations, including Australia’s first two aircraft, AU-1 (A35-001) and AU-2 (A35-002), which have been based at Luke Air Force Base, Arizona since late 2014 as part of the International Pilot Training Center there.

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6 Comments

  • Harry

    says:

    Good to hear!

    I am glad this price includes the aircraft and engine! What this fee? I presume the profit to LM or the US?

    What is the cost when configuring into the price:

    1. The future upgrade to FOC?
    2. The unfinished helmet?
    3. The necessary ALIS system?
    4. The infrastructure changes necessary in Australia to operate the F-35?
    5. Future as yet unfound faults/deficiencies/fixes, etc?
    6. Simulators?
    7. The as yet FOC new weapons software upgrades (I’ll leave the weapons out for now)?
    8. The new ejection seat?
    9 The cost of delivery?
    10. Spare parts?

    Whats the final cost (excluding the over and above 30+ years operating costs)!?

    Ive heard wild estimates when all that is taken into account… at least the sticker price is dropping as promised…

  • Paul

    says:

    Funny how the price came down so quickly when Trump came in.I know it was coming down,but not this much.Coincidence?

  • Jasonp

    says:

    Harry – why the interest in the life of type operating cost? No other aircraft has ever been subjected to this standard. How can they project upgrades in 20+ years time?

    Paul – Nothing to do with Trump. the JPO announced the prices would be >6% lower for LRIP 10 a month before the inauguration. Trump is just blowing his own…trumpet!
    http://www.businessinsider.com.au/trump-f35-price-reduction-2017-1
    http://www.businessinsider.com.au/bogdan-f35-program-not-out-of-control-2016-12

  • John N

    says:

    Harry,

    The budget ‘allowance’ for the ‘currently’ approved 72 F-35A’s for the RAAF is A$17.1B (this figure also includes A$2.6B contingency funds).

    The remaining A$14.5B includes the cost of 72 F-35A airframes, the support systems, base and infrastructure upgrades, weapons, training, spares, (but not sustainment costs, which is how it is always done here in Australia). Those figures have been around for a long time too.

    Paul,

    Coincidence? Actually yes.

    Trump can take all the credit he wants (really, who cares?), but the figures released for LRIP 10 are inline with published reports ‘prior’ to the ‘Trump era’, see the link below:

    https://www.aspistrategist.org.au/trump-f-35-600-million-question/

    As to LRIP 10, it is interesting to look at the reported unit costs of the various lots – LRIP 1-8 exclude engines, LRIP 9 & 10 include engines (all figures in $ million):

    * LRIP 1 – F-35A – $221.2
    * LRIP 2 – F-35A – $161.7 – (av cost both A&B)
    * LRIP 3 – F-35A – $128.2 – (av cost both A&B) – engine reported to be $16m
    * LRIP 4 – F-35A – $111.6
    * LRIP 5 – F-35A – $107.0
    * LRIP 6 – F-35A – $103.0
    * LRIP 7 – F-35A – $98.0
    * LRIP 8 – F-35A – $94.8
    * LRIP 9 – F-35A – $102.1 – (inc engine) – reported cost of engine $13.3m
    * LRIP 10 – F-35A – $94.6 – (inc engine) – assume possibly now around $12m?

    LRIP 9 F-35A (excl engine, $13.3) would work out at $88.8 for the airframe, LRIP 10 F-35A (excl engine, assume approx. $12m?) would work out at approx $82.6 for the airframe.

    LRIP 10 airframes will be delivered by end of 2018 (which include 8 F-35A’s for the RAAF).

    The projection for 2019, FRP 2, (and there is LRIP 11 and FRP 1 in between), the target cost of an F-35A is $83.4m (inc engine).

    Anyway, cost is heading in the right direction as production ramps up, all good!!

    Cheers,

    John N

  • Harry

    says:

    Sorry Jason you misread what I said: “what’s the final cost, excluding LoT”

    Thanks Jason for that info. Yes I was aware. What I was getting at is that one could price the plane differently depending on what you actually account for. So for things like F-35 infrastructure plus all those additionally I mentioned the costs could go up to $150+ mil according to the Newcastle paper a few years ago, for example.

    Its great that the sticker price is lower than $100 mil but that doesn’t figure in the final price once FOC is established. Some planes (typically in pre LRIP 10s have to back to the factory and have design fixes and updates applied. So even that price of $94.6 mil is not the final price of the aircraft. If the plane hasn’t reached FOC then that price is just the LRIP 10 price before it goes back to the factory (potentially) for more work for FOC!

    What I am asking was for the total price per plane (excluding LoT) after all considerations (obviously except for training, fuel, weapons, personnel, LoT, sustainment, etc.) But I guess no one know yet…

  • Raymond

    says:

    What Jasonp & John N said.

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