Pentagon welcomes stable cost of Lockheed F-35 jet

By Andrea Shalal-Esa

WASHINGTON, April 8 (Reuters) - The Pentagon on Wednesday welcomed news that costs for the Lockheed Martin Corp (LMT.N) F-35 fighter jet program remained stable last year and said it expected approval soon to buy a second batch of the jets.

"I'm honestly happy any time costs don't increase," Maj. Gen. Charles Davis, the joint program executive officer for the program, told reporters.

The F-35 or Joint Strike Fighter is the most expensive weapons program in U.S. history. The Pentagon is developing versions of the fighter for the Air Force, Marine Corps and Navy, and to sell to other countries.

The Pentagon on Monday released new data showing the overall cost of the F-35 program, including procurement and research and development, declined by $981.3 million, or 0.3 percent, to $298.8 billion.

The cost of each F-35 rose 38 percent to $69.3 million per plane at the end of 2007 from $50.2 million in October 2001, when the development program began. But that was an increase of just 0.25 percent from December 2006, according to the data, first reported by Reuters last week.

Cost estimates are based on current plans that call for the U.S. military to buy 2,443 F-35 fighter jets through 2034. However, expected purchases of 600 more jets by foreign countries helping develop the program could drive costs even lower in the long run, Davis said.

For example, Israel's plans to buy 25 F-35 jets beginning in 2011 could help trim the cost of the overall program by $500 million, he said. Japan also is in talks with the Pentagon and Lockheed about possible purchases.

Davis said details were still being worked out, but he expected Pentagon acquisition chief John Young to sign a memorandum approving the purchase of a second lot of six conventional takeoff and landing models for the Air Force.

That approval could come as soon as Wednesday, he said.

Young and other senior officials on the Defense Acquisition Board examined the F-35 program in detail on March 26.

The cost of each of the new airplanes would actually be a "little bit below" the level estimated in the Pentagon's acquisition documents, Davis said.

A decision on buying six short takeoff, vertical landing versions of the F-35 would be made after the aircraft had its first flight, probably in May or June, he said.

The F-35 aircraft will fly in conventional mode at first, with a test of the short takeoff vertical landing (STOVL) mode scheduled in the fourth quarter, Lockheed F-35 program manager Dan Crowley told reporters. Program officials were now able to base cost estimates on actual production costs, not projections, he said.

Engine maker Pratt & Whitney, a unit of United Technologies Corp (UTX.N), now understands and knows how to remedy the problem that had caused engine blades to snap off in the engine that will power the STOVL version of the F-35, Davis said. (Reporting by Andrea Shalal-Esa; Editing by Brian Moss)