F-35 Program Sees First Drop In Prices

Lockheed Martin's F-35 program, the costliest fighter aircraft in the world, just got a little less expensive. The U.S announced a one percent drop in prices Thursday, while averting the cost increases in other programs in recent years.

The U.S Annual report submitted to Congress showed a $40 billion, or 2.4 percent, cost increase in 78 major arms programs, mainly following the accounting changes and higher order quantities.   

The U.S acquisition report declares a drop to $391.2 billion cost from last year's estimate of $395.7 billion for developing and building the F-35, a new radar-evading fighter jet.  

But, the $1.1 trillion cost of operating and maintaining the fleet of 2,443 new fighter jets over the next five decades is not been revised in the current report.

Lockheed is developing three models of the supersonic, single-seat F-35 fighter for the U.S. Air Force, Navy and Marine Corps, as well as countries like Britain, Australia, Canada, Norway, Denmark, Italy, the Netherlands and Turkey are helping fund its development. Israel and Japan have also placed orders for the new plane.

Current plans call for the U.S. military to buy a total of 2,443 F-35 jets in coming years, with its allies slated to buy 721 additional fighters, although many analysts believe mounting budget pressures could ultimately reduce the total purchase.

Lockheed said it will continue to work with defense officials to reduce the costs of the F-35 program further.

"This is the first year a cost reduction was noted. We will work with the F-35 Joint Program Office to implement further cost saving measures which will result in additional significant decreases to the total program cost," said Lockheed spokesperson.

The U.S report projected the total cost of the F-35 programs down to $1.50 trillion from last year's estimate of $1.51 billion, reflecting the lower projected acquisition cost.

It said the average cost of the conventional F-35A model, excluding R&D costs, had dropped to $76.8 million per plane in 2012 dollars, compared with $78.7 million a year earlier.

Projected operating and maintenance costs, which include the cost of fuel will be updated by this fall, assuming that fuel costs will rise to $8.04 per gallon, compared with $4.24 in 2012, U.S officials revealed.