Wednesday, November 27, 2013

South Korean order will help drive F-35 price down

To me, that is one of the the big points about this order.   It helps provide those economies of scale that the manufacturer needs to drop the price of each aircraft:
Once Seoul - as new buyer - formally notifies the Pentagon about its planned purchases, those jets will be added to the total number of expected purchases by the U.S. military and allies that is used by defense officials to estimate the cost of each airplane.

By 2019, the Pentagon projects the cost of each new F-35 fighter plane will be around $85 million, putting it on a par with the cost of current fighter planes, said Jim McAleese, a Virginia-based defense consultant. 
According to the story the South Korean order could end up saving the US military about $2 billion.   More foreign sales (outside the original allied partners) of the aircraft, the lower the cost of each for the US and it's partners. And, as the article points out, foreign buyers are showing increased confidence in the F-35 via their orders.



  1. I don't see how an order of 40 planes will drive down prices to any great extent. It certainly shows confidence in the plane from other countries, but since the US plans to buy 2,443 f-35's
    40 planes is just a drop in the bucket really. Even the 100 odd that countries like Australia are buying are just going to add a couple of % to the overall total. Even if all of the US's allies buy a total of, say 1,000 F35's, the US will still be buying the Lion's share (although 1,000 planes would have an affect on the price per plane!)

  2. So by that reasoning, the loss of 288 prospective foreign F-35 sales orders*, because of high F-35 cost, should further increase F-35 cost.

    *To UK (102), Italy (40), Netherlands (48), Canada (65), Norway (33)

    The Reuters story also quotes Loren Thompson (a paid Lockheed shill) as saying that “Singapore would likely follow [Korea] with its own order, followed by Malaysia and possibly New Zealand.” This is nonsense.