* Projected operating cost now seen at $857 billion
* F-35 is Pentagon's costliest weapons program
* Marine Corps sees savings in cost per flying hour
By Andrea Shalal-Esa
WASHINGTON, Aug 21 The U.S. government has
slashed its estimate for the long-term operating costs of
Lockheed Martin Corp F-35 fighter jets by more than 20
percent to under $1 trillion, according to a senior defense
official, a move that could boost international support for the
The Pentagon has been under pressure for over a year to
revise its estimate of maintaining a fleet of more than 2,000
F-35s over 55 years, with industry and military officials
arguing that many of the assumptions were outdated and off base.
The new estimate of $857 billion could help ensure the new
plane turns out to be as affordable as advertised and comes days
after South Korea determined that only a bid by Boeing Co
for its F-15 Silent Eagle came in below a $7.4 billion price
ceiling for its plan to buy 60 new fighter aircraft.
Lockheed's F-35 and the Eurofighter Typhoon remain in the
running, but Boeing's pricing marked a step toward winning the
contract, according to sources close to the process.
A final decision is expected in mid-September.
It was not immediately clear what impact the lower F-35
operating estimate would have on the South Korean tender, but
U.S. officials said Seoul could decide to restart the
competition and ask for new bids.
The Pentagon's revision reflects data about the plane's
performance based on over 7,000 hours of test flights and
revised assumptions about how it will be used and maintained,
said the official, who was not authorized to speak publicly.
The estimate was provided to the Senate Armed Services
Committee by the Pentagon's F-35 program chief, Air Force
Lieutenant General Christopher Bogdan, the official said. A
revision had been flagged in June when the Pentagon's
acquisition chief said he had expected a review to result in
lower operating and maintenance costs.
The F-35 Joint Strike Fighter is the costliest weapons
program in U.S. history. The Pentagon estimates it will cost
$392 billion to develop and build 2,443 of the new jets for use
by the U.S. Air Force, Navy and Marine Corps.
Lockheed is developing three models of the radar-evading
warplane for the United States and eight countries that are
helping fund its development: Britain, Australia, Canada,
Norway, Turkey, Italy, Denmark and the Netherlands.
The revision of the estimate was first reported by Bloomberg
The cost per flying hour of the F-35B model, which can land
like a helicopter, is likely be 16.6 percent lower than the
earlier Pentagon projections, Lieutenant General Robert
Schmidle, deputy Marine Corps commandant for aviation, told
Reuters in an interview on Wednesday.
The Marines plan to start using the F-35B for military
operations from mid-2015.
A second senior defense official said the current estimate
by the Pentagon's Cost Assessment and Program Evaluation (CAPE)
office put the cost per flying hour of the F-35B model at over
$41,000, but the actual cost would likely be closer to $37,000.
A detailed analysis by the Marine Corps showed this would
cut the plane's annual operating costs by nearly $600 million,
or $12.3 billion over the next five decades, the official said.
Schmidle said the Marines would fly the planes in short
takeoff, vertical landing, or STOVL mode just 10 percent of the
time, far less often than the 80 percent rate factored into the
initial estimates. The manning levels assumed in the initial
estimates were also higher than in practice, he said.
"The Marine Corps has very aggressively stepped out in
trying to find ways to decrease the operating and support costs,
specifically with regard to the cost per flight hour," Schmidle
said. "I wanted to challenge every assumption."
He said he was confident additional savings could be
achieved in coming years through efforts by Pratt & Whitney, a
unit of United Technologies Corp to lower the cost of
operating the airplane's engine, in line with trends seen on
other military aircraft programs.
He said the Marines also expected to trim maintenance costs
by doing up to 90 percent of the work in house, rather than
farming it out to contractors. Similar efforts had resulted in
big savings on the V-22, the Marines' tilt-rotor aircraft, he
Schmidle said the Marine Corps' analysis forecast $520
million a year in lower maintenance and operating savings once
the three other planes it now uses were replaced by the F-35, a
process that is currently slated to be completed by 2030.
He said the impact of mandatory Pentagon budget cuts on the
F-35 program remained unclear, but said the savings expected by
replacing the existing AV8B Harriers, EA-6B Prowler electronic
warfare jets and F/A-18 fighters with F-35s could make the case
for accelerating that process.