Lockheed Martin, in a dogsled with Boeing, puts F-35 on sale
The airline offers the fifth generation F-35 base model for $ 80 million pieces in negotiations with the Pentagon, according to a report by DefenseOne. It is an 11% reduction from the $ 90 million price in September last year when the last tranche of the warriors was ordered.
A Lockheed Martin F-35A in Flight.
Lockheed Martin's F-35A in Flight. Image source: Lockheed Martin.
<p class = "canvas-textile text-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The F-35 has been Destroyed with long development delays and cost overruns but the aircraft is now operational and becoming an important part of the US arsenal, the Pentagon is expected to complete its next order of the fighter this summer, analysts have expected each batch to be cheaper than last but the amount of this latest reduction is probably somewhat surprising. "data-response time =" 34 "> The F-35 has been destroyed with long development delays and cost overruns, but the aircraft is now operational and becoming a central part of the US arsenal. The Pentagon is expected to complete its next fighter order this summer. Analysts have expected each batch to be cheaper than the last, but the amount of this latest reduction is likely to be somewhat surprising.
New for the price of old
<p class = "canvas -text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Lockheed Martin has been under constant pressure to reduce the cost of F-35 but the rate has increased since the Pentagon reversed course and decided to buy new Boeing F-15s for the first time in two decades. Modernized F-15EX is significantly upgraded to its original 1960s, with a sophisticated electronics package, but it's still the latest generation technology that was currently of little interest to military procurers. "Data Reaction =" 36 "> Lockheed Martin has been under constant pressure to reduce the cost of the F-35, but the speed has increased since the Pentagon reversed course and decided to buy new Boeing F-15s for the first time in two decades. The modernized F-15EX is significantly upgraded to its original 1960s, with a sophisticated electronics suite, but it is still the latest generation of technology that has been of little interest to military procurement officers.
The decision to buy the F-15s, according to the Pentagon's summary summary, "reflects the institute's team capacity strategy to cope with various threat situations." The government buys the F-35's "to tackle advance technology plugs that are being distributed by Russia and China," the report says. However, in order to defeat lower technology platforms, it will use older designs "nominally lower operating costs compared to 5th generation combat beams" such as F-35.
Cost is the key. The F-15 decision came down to the Pentagon who wanted to push as much military as possible from limited funding and at a time when the military had a long list of new equipment.
Three Boeing F-15s on the run.
Boeing's F-15 fighter. Image source: Boeing.
At $ 80 million per unit, the F-35 is within easy reach of an F-15. Lockheed's sales line to the government is that there is no logical reason to buy the latest generation technology when you can get ahead of about the same price.
More than just the sticker price
While Lockheed Martin has made steady progress in reducing the sticker price, other costs remain in Boeing's favor. The Pentagon hopes to get the operating cost of an F-35 down to $ 25,000 per hour by fiscal 2025, down from about $ 44,000 per hour in fiscal 2018, but defense officials are not sure the goal is achievable.
Robert B. Daigle, director of the Pentagon's Cost Assessment and Program Assessment Office, under an early May subdivision committee said that the $ 25,000 is "a target, and it's not our projection for where we actually should be."
F-15, as a comparison, is significantly less expensive to operate at an estimated cost of less than $ 30,000 per hour. Daigle said the Pentagon estimates that the total cost of ownership of an F-35 over a 10-year period is $ 47 million more per aircraft than an F-15 that has a similar amount of time.
"These 4 generation warriors are the most cost-effective way to meet lower mission requirements, ensuring that our 5th generation fighters are available for high-end battles," Daigle said in his prepared testimony.
| Aircraft |
Acquisition cost per aircraft ] |
10 year operating cost per aircraft |
10 years cost of ownership |
|---|---|---|---|
|
F-35A |
$ 100 million |
$ 110 million |
$ 210 million |
|
] F-15EX |
$ 90 million |
$ 73 million |
$ 163 million |
<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) type = "text" content = " Data source: Pentagon Office for cost assessment and program assessment. All figures in fiscal 2020. Acquisition cost is total flight fee. " data response = "72"> Data source: Pentagon Office of Cost Assessment and Program Evaluation. All figures in fiscal 2020 dollar. Acquisition cost is total flight fee.
Lockheed Martin is significantly more optimistic that it can hit the $ 25,000 target and notes that the company has reduced its share of the cost per flight time by 15% since 2015. It is hoped that jet production ramps up, so will the production Jet widgets and components reduce the total cost of spare parts. Maintenance costs should also be reduced as the Pentagon gets more experience working on the F-35.
Lockheed is the long-term winner
<p class = "canvas-atom canvas text Mb (1.0em) Mb) – sm Mt (0.8em) – sm" type = "text" content = "Lockheed Martin's cost-saving effort is unlikely to stop buying F-15s, but they are an important step in the right direction for Lockheed to be on track to turn its long-term goal of lowering the airline ticket on a F-35 to $ 80 million base model 2020, which will help secure a stable order in both the United States and from Allies and keep the F-35 at the goal of being a trillion dollar warplane for the company and its key suppliers. 75 "> Lockheed Martin's cost-saving effort is not likely to stop buying the F-15, but they are an important step in the right direction for the company anyway. Lockheed seems to be on track to set its long-term goal of lowering the airline ticket on a model model F-35 to $ 80 million by 2020, helping to ensure a stable order in both the US and Allies and retain F-35 on the goal of being a trillion dollar war plan for the company and its key suppliers.
<p class = "canvas-textile textile Mb (1.0em) Mb (0) – sm Mt em) – sm" type = "text" content = "Lockheed Martin is a best buy among defense contractors due to the variety of its offerings, but even with the broad portfolio, the F-35 remains a critical factor in the company's long-term success, no matter what the Air Force decides to do with the F-15, it seems the Pentagon will buy many F-35s well into the foreseeable future. "data-reactid =" 76 "> Lockheed Martin is a best buy among defense contractors due to the variety of offers, but even with the broad portfolio, F-35 remains a critical factor in the company's long-term success. No matter what the Air Force decides to do with the F-15, it seems certain that the Pentagon will buy many F-35s well into the foreseeable future.
No matter how this battle goes, Lockheed Martin is the winning war.
<p class = "canvas-atom texttext Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Mer From The Motley Fool "data-response =" 78 "> More from The Motley Fool
<p class =" lerretskompetanse tekstil Mb (1.0em) Mb Mt (0.8em) – sm "type =" text "content =" [19659044] Lou Whiteman has no position in any of the aforementioned shares. Motley Fool has no position in any of the aforementioned shares. Fool has a disclosure policy . "data-response time =" 86 "> Lou Whiteman has no position in any of the aforementioned shares. Motley Fool has no position in any of the aforementioned shares. Motley Fool has a disclosure policy.
