Lockheed Martin [LMT] has made, and will continue to make, investments needed to bring down the costs to operate the F-35 fighter jet but a majority of the costs are out of the company’s control and will require a team approach to lower, James Taiclet, chairman, president and CEO of Lockheed Martin, said this week.
Taiclet said he soon hopes to meet with the military service chiefs and that “we will all get together on a tiger team and address this in the only way it can be can be successfully addressed as an integrated team. So that’s how we’re going to address it.”
Lockheed Martin has invested $500 million in the past few years to take about 40 percent of the cost out of the F-35 program that it can control and plans to further reduce these costs by another 40 percent in the next five years, Taiclet said on Monday during the company’s second quarter earnings call. But he pointed out, that overall, Lockheed Martin only controls about 40 percent of the cost, with the rest of the expenses tied to the aircraft’s engine and the government and military portions of the program.
“If we don’t have an all-in strategy together to address this, we’re not going to hit the goals,” Taiclet said of the need to create an industry and government team to bring a holistic approach to cutting the costs to fly the aircraft down to $25,000 per flight hour. Lockheed Martin set the goal in 2019.
A year ago, the F-35 Joint Program Office (JPO) said the hourly cost to fly the aircraft was $35,000. Lockheed Martin’s hourly flying cost target is aimed at meeting the JPO’s annual $4.1 million in operations and sustainment costs per aircraft.
Pratt & Whitney, a business segment of Raytheon Technologies [RTX], provides the F135 engine used on the single-engine strike fighter.
Different variants of the F-35 are being built and delivered for the Air Force, Navy and Marine Corps and international militaries. The program represents just over a quarter of Lockheed Martin’s sales.
During the earnings call, Taiclet, a former Air Force pilot, also touted some of the F-35’s performance metrics.
For example, he said, the mean flight hour between failure for the aircraft is “nearly double the contractual requirement,” which means that when pilots “get an assignment with a tail number for a mission on any given day, they’re twice as likely to get in that airplane and fly the mission as they are in any other fourth-gen plane.” The F-35 is considered a fifth-generation fighter aircraft.
He also said the F-35 is “about twice as reliable as a fourth-generation fighter” and that the “labor hours and maintenance” for each flight hour of the aircraft is “about two-thirds of the contractual requirements. So, if you get out to bases, talk to commanders who have either in their wings, F-35s and other aircraft, or they’ve commanded different squadrons of different types of aircraft, they’ll tell you that for the front-line performance in the area of operations if you will, the F-35 is sort of head and shoulders above legacy aircraft.”
Taiclet said that during the most recent 18 months of operations with U.S. Central Command, F-35s flew 1,300 sorties with a mission capable rate approaching 75 percent, and sometimes between 80 and 90 percent in a given week.
“And that’s really, really strong having been out and done this before,” he said. “I can tell you, that’s top shelf.”