Exclusive: Pentagon nears F-35 jet deal worth about $30 bln – sources

A Lockheed Martin F-35 plane is seen on the ILA Air Present in Berlin, Germany, April 25, 2018. REUTERS/Axel Schmidt

WASHINGTON, July 18 (Reuters) – The U.S. Division of Protection is nearing an settlement with Lockheed Martin Corp (LMT.N) for round 375 F-35 fighter jets over three years, three sources mentioned on Monday, amid expectations of a value improve for the commonest model of the jet resulting from decrease portions and inflation.

The primary F-35A value $221 million when it got here off the manufacturing line in 2007. Since then, manufacturing portions and know-how have elevated, serving to the value of the stealthy fifth-generation fighter fall to $79 million because it gained consumers.

Talks had stalled in latest weeks over information rights, two folks aware of the discussions mentioned. However a Monday noon assembly in Washington might yield a “handshake” resolution on each a value vary and amount, the folks mentioned. If an settlement is reached, finalized pricing wouldn’t be locked in for a number of weeks if not months, however an final complete worth is in a variety round $30 billion.

The handshake settlement would come because the aviation business gathered for the return of the Farnborough Airshow, aiming for a show of confidence after the devastation of COVID-19, regardless that the one data more likely to be damaged on the occasion in southeastern England are for sweltering temperatures.

Amid the pandemic, Lockheed started to foreshadow that the value of the jet might rise as economies of scale diminished and provide chains stumbled. A pre-pandemic forecast for this three-year purchase confirmed round 485 jets could possibly be included, however the 22% quantity lower would definitely impression total value of the F-35A, the commonest model of the jet. learn extra

The F-35 is available in three configurations, the A-model for the U.S. Air Drive and U.S. allies; an F-35 B-model, which may deal with quick takeoffs and vertical landings; and F-35C jets for plane service landings.

A Pentagon earlier three-year “block purchase,” signed in 2019, was for 478 F-35 fighter jets, permitting Lockheed to purchase bigger portions of parts to cut back prices by about 8%, to $34 billion, versus negotiating annual contracts.

Lockheed executives have mentioned that any nation with an F-16 jet, the predecessor to the F-35, is a possible buyer.

The F-35 has had a number of latest successes in jet fighter competitions, together with Finland, Switzerland and Germany. Potential clients embrace Greece and the Czech Republic. learn extra

Overseas army gross sales like these of the F-35 are thought-about government-to-government offers the place the Pentagon acts as an middleman between the protection contractor and a overseas authorities.

The F-35 jet program represents about 27% of Lockheed’s income.

Reporting by Mike Stone in Washington; Enhancing by Mark Porter, Leslie Adler and Jonathan Oatis

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