Norway may reduce its F-35 order by ten aircraft due to budgetary constraints, Norweigian broadcaster NRK reported on Wednesday.
The US dollar’s strong appreciation against the Euro and other European currencies is said to be the reason for Norway’s budgetary overshoot. As all F-35 contracts are billed in US dollars, foreign F-35 buyers are vulnerable to currency fluctuations.
Norway will not able to buy the 52 aircraft it plans to purchase and may settle at a level of around 40-42, the NRK said. Norway last week received the first two F-35s.
"The Norweigian acquisition of the F-35 is progressing on schedule. In total we now have ten aircraft in various stages of production, and the price for the two aircraft delviered in 2015 has proven to be in line with our earlier estimates," Norwegian Defense Minister Ms Eriksen Soreide said in a statement after receiving the first two aircraft.
The Euro and other European currencies have been weakening against the dollar since the middle of last year leading to a sharp increase in the F-35’s acquisition of European partners such as Norway and the Netherlands. In fact, the Dutch minister of defense recently commented that the cost of the planned F-35 acquisition had increased by €550 million in less than two years because of fall of the Euro against the US dollar.
The rise in the value of the US dollar is also expected to nullify any price cuts or other savings Lockheed Martin may offer to foreign buyers.