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Future F-35 Cost Growth Will Be Offset With Aircraft Delays

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Nov. 2 (Bloomberg) -- The U.S. Defense Department will continue to pay for cost growth within the Lockheed Martin Corp. F-35 fighter jet project, the Pentagon’s most expensive program, by delaying aircraft purchases, two Air Force officials said today.

The Defense Department “plans for the Joint Strike Fighter program to pay any cost increases with funding internal to the program; i.e. aircraft procurement funding,” the officials told a House Armed Services Committee aircraft panel in discussing the $382 billion program for the Air Force, Navy and Marine Corps.

The deputy chief of staff for operations, plans and requirements, Lieutenant General Herbert Carlisle, and Global Power Programs Director Major General Jay Lindell included the F-35 statement in testimony about the state of Air Force aircraft programs.

The Pentagon on two occasions since February 2010 has delayed purchase of 246 aircraft to pay for extended development, to transfer funds to other programs or to help cover $78 billion in deficit reductions the White House directed last year.

The Pentagon also announced last week it cut four F-35 jet fighters from its next contract with Lockheed Martin in part to pay for cost overruns on the first three orders.

The U.S. Air Force and Navy had planned to buy a total of 34 jets in the fifth order, for which negotiations are still under way. The order is now for 30 aircraft.

Vice Admiral Mark Skinner, the principle military deputy for research to the assistant secretary of the Navy, told the panel “affordability remains a concern.”

Still, the F-35s “return on investment” of the F-35 outweighs the operations and support costs the Navy will incur if the current fleet of F-18s and other fighters continue to be extended beyond their designed service flight lives.

“It is important to stress, no major or insurmountable technical problems have been discovered,” Skinner said.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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