By Robert Wall and Doug Cameron
Lockheed Martin Corp.'s F-35 Joint Strike Fighter will make its
overseas airshow debut this summer in the U.K. as part of efforts
to boost foreign sales of the jet and offset near-term cuts in U.S.
purchases and cuts by some international partners.
The F-35, the Pentagon's most expensive conventional-weapons
program, is due to make appearances in July at the Farnborough
International Airshow, and another event at the Fairford military
airfield, the U.K. defense ministry said on Wednesday.
Boosting production rates is viewed by the Pentagon and its
contractors as essential to lowering the cost of the jet, which the
military official leading the program last week said was currently
around $112 million.
The head of the U.S. Air Force said last week that the Pentagon
could trim its plan to buy almost 2,500 F-35s over the next 20
years.
The U.K. is acquiring the F-35B jump-jet version that is
scheduled to be combat-ready for the first time with the U.S.
Marine Corps next year, though the Pentagon has said the plane
still needs to surmount a number of hurdles related to reliability
and some hardware and software issues.
As the largest overseas partner in the Joint Strike Fighter
program, the U.K. is providing about 15% industrial content through
the participation of companies including BAE Systems PLC and
Rolls-Royce Holdings PLC .
The U.K. has taken delivery of three test airplanes and is in
discussions to place an order for the first 14 training and
operational aircraft. The fighter is due in the U.K. around 2018 to
prepare for operational use from the Queen Elizabeth-class aircraft
carriers, the first of which is due to be named on July 4. The U.K.
hasn't defined the total number of jets it expects to purchase
ahead of a major defense review due next year.
The Netherlands, Italy and Norway are among European countries
that have signed up to flying the single-seat combat plane. Denmark
also is considering buying the aircraft as part of a competition
that includes the Boeing Co. F/A-18 Super Hornet, Saab AB Gripen,
and Eurofighter Typhoon built by a consortium of BAE, Airbus Group
NV, and Finmeccanica SpA.
The Pentagon has committed to buy 2,443 of the jets, and though
some overseas governments have already trimmed their original
orders for the plane, it is the first time the U.S. has suggested
it may reduce its current planned purchases.
"It's possible," said Air Force Secretary Deborah Lee James when
asked at a Senate hearing about the prospect of the total purchase
being cut.
Analysts have long been skeptical about the size of the
Pentagon's eventual purchase. While funding has been relatively
protected, a reduction would ripple through the hundreds of
contractors. Lockheed already estimates the jet accounts for around
15% of group sales, a figure seen rising to 25% when production
peaks, which the Pentagon expects to come in 2022.
"We do not believe that anyone expects the program will come
close to that number," said Sanford C. Bernstein & Co. analyst
Douglas Harned in a recent note to clients.
The Pentagon said this week it may have to cut as many as 17
F-35s, 15 for the U.S. Air Force and two for the U.S. Navy, if
mandatory budget cuts take effect from 2016.
"We need production program stability in order to meet the cost
objectives on the program," said engine maker Pratt & Whitney
in a statement.
Write to Doug Cameron at doug.cameron@wsj.com
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