Economy Of Scale May Make F-35 Only Game In Town

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Lockheed Martin last week said it is seeing growing demand for its F-35 Joint Strike Fighter. As a joint development project in a severely crippled world economy, those countries that can afford to be involved may realize big benefits from joint collaboration. Lockheed Martin believes the aircraft's characteristics will make it a viable replacement for some 13 models currently used by partner countries worldwide. And the company hopes that the vast amount of F-35s to be produced (possibly more than 2,400) will push down the per-unit costs of the aircraft to about $80 million per copy (not including research and design costs), making it ever more alluring when compared with competing designs. Critics claim the aircraft is not as maneuverable as some other available aircraft and not especially stealthy while carrying the munitions that make it particularly lethal. But the aircraft's economics and joint technology mean long-range targeting capabilities and mission versatility at a price that's hard to dismiss. And then there's the support the aircraft is seeing from the U.S. government.

The Obama administration's budget prioritizes the F-35's massive production numbers and moderate cost over the F-22's massive abilities and massive costs. In May, the Office of Management and Budget proposed to terminate the F-22 after production of 187 aircraft. With orders for more than 1,500 F-35s and a planned fleet of nearly 2,500, Lockheed Martin hopes to within six years have automated production lines capable of turning out F-35s at a rate of one per day (the current rate is about one per month). And where history has seen other aspiring manufacturers wrongly rely on the economy of scale to allow them to maintain initially low price targets, that doesn't seem to be a factor here. With the cancellation of the F-22 and the support of the U.S. government, there's little reason to think the F-35 won't make its projected numbers. And if it does, there will be little room for other aircraft. As Teal Group analyst Richard Aboulafia recently told the BBC, "It's quite likely that after 2020, the market will comprise the F-35 family and some Russian planes."