Thursday, August 1, 2013

F-35: With new contract, prices continue to drop

I've pointed out numerous times that full production of F-35s means lower cost F-35s.  The latest contract seems to bear that out.  LRIP's 6 and 7 will see F-35s produced at a lower price than previous LRIPs.  And this is a continuing trend:
[T]he company says that unit cost of each variant will be reduced by about 4% lot over lot. Based on the pricing targets for LRIP 5, which was inked late last year — $105 million for the F-35A, $113 million for the F-35B and $125 million for F-35C — the per-unit targets can be projected for these new LRIP 6 and 7 jets.

The F-35A variant, designed for conventional takeoff and landing (and the version with greatest appeal to international partners) is projected to cost $100.8 million in LRIP 6 and $96.8 million in LRIP 7. This is the first time since the program began production that the projected unit cost will be under $100 million.

The F-35B, optimized for short takeoff and vertical landing, is expected to cost $108.5 million in LRIP 6 and $104.2 million in LRIP 7.

Finally, the F-35C, designed with a larger wing for aircraft carrier operations, is expected to cost $120 million in LRIP 6 and another $115.2 million in LRIP 7. 
So in LRIP 7, the CTOL variant goes below $100 million.  This is the cost trend LM told DoD that production would take (if the pipeline was kept full and the full buy was made) and critics claimed would never happen.


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