Lockheed Martin is in the final stage of negotiating $37 billion worth deals to sell 440 F-35 fighter jets to 11 nations, including the US.
The deal includes all three variations of F-35 Lightning II jet, a Lockheed spokesman said Monday to several media outlets at the Paris Air show.
The nations in the group are Australia, Denmark, Israel, Italy, Japan, the Netherlands, Norway, Turkey, South Korea, Britain and the United States. Since all these countries are current customers of the F-35, the 440 planes order is most likely repeat orders for the flighter jet.
"This would be biggest deal yet for the stealthy F-35 jet, set to make its Paris Airshow this week." Reuters reported stating that the deal indicates that there is major change in practices from annual purchases to more cost effective multi-year deals which would reduce the cost of each jet. The cost of each jet is not final but the average price for each of 440 jets was expected to be $85 million. The multi-year deal consist of three tranches over fiscal years 2018-2020.
The memorandum of understanding being negotiated between Lockheed and the customers aims to procure 135 or more jets in fiscal year 2018 for delivery in 2020 for about $88 million per jet.
The procurement would increase to 150 or more jets per year in the following fiscal years, 2019 and 2020. The price in 2019 could be $85 million for the F-35 "A" variant and could drop below $80 million in 2020. That would mark the lowest price ever paid for an F-35, making this as a major step in reducing the overall cost of each jet.
The memorandum of understanding will guarantee contracts will take place in each successive future year. This allows the manufacturing group led by Lockheed to take advantage of greater economies of scale, reducing the cost of each jet.
The F-35 is expected to make its air show debut at Paris later in the week in one of the most eagerly awaited flight demonstrations.
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