F-35 Engine Unit Costs Continue to Grow Even As Production Increases
(Source: Defense-Aerospace.com; published April 28, 2015)
In addition to its well-documented technical problems and “very poor reliability,” Pratt & Whitney’s F-135, seen here running at full afterburner, has shown no sign of lower unit costs even as production has ramped up. (P&W photo)
PARIS --- The unit cost of the F-135 engines that Pratt & Whitney is producing for the F-35 Joint Strike Fighter increased last year, and has stagnated for the past five years, showing no sign of dropping even though the number of engines has doubled.

This is the exact opposite of how the program is expected to perform, since the F-35’s affordability is predicated on unit prices falling steadily as production numbers increase, by virtue of procurement savings due to bigger orders of components and of lower manpower costs as workers gain more experience (the learning curve effect).

In reality, the cost of F-135 engines has moved irregularly up or down each year, but with no correlation to the number of engines produces. And, in three of the past five years, unit cost actually increased over the previous year,

According to figures released in an April 27 report by the DoD Inspector General, the Pentagon paid an average of $31.8 million for each F-135 engine in Low Rate Initial Production (LRIP) Lot 2.

Four years later, in LRIP 6, the unit price was still $29.9 million, a drop on only 6 percent over four years, although the number of engines per year had more than doubled, from 16 to 38.

Closer examination of the DoDIG figures shows that, contrary to expectations, the LRIP 6 price is actually higher – by about 6% -- than those produced the previous year in LRIP Lot 5.

The irregularity of F-135 unit costs, and their annual variance, is illustrated in the table below, compiled by Defense-Aerospace.com from figures released by the DoD Inspector General:

F-35 engine unit costs by annual production lots



Defense-Aerospace.com analysis of DoD Inspector General data


The irregularity of these price variations makes it impossible to predict future prices, and clearly contradicts long-standing promises by industry and Pentagon program management that unit prices would drop steadily as production ramps up.

It is worth noting that, at the present cost of around $30 million, the F-135 engine alone represents over one-third of the cost that the Joint Program Office (JPO) expects for an entire F-35A aircraft in 2019.

In testimony before a subcommittee of the House armed Services Committee in March, JPO director Lt Gen Christopher Bogdan repeated that “the goal is to reduce the flyaway cost of the F-35A to between $80 and $85 million dollars by 2019.”

This looks unlikely, however, as average airframe costs currently exceed $200 million and if the engine alone costs $30 million.

In the wake of that hearing, the Subcommittee on Tactical Air and Land Forces on April 14, 2015 called for an independent report of the F135 engine program.

Its markup of the FY2016 budget request states the report would include “an assessment of the reliability, growth, and cost reduction efforts with respect to the F135 engine program, including a detailed description of the reliability and cost history of the engine, the identification of key reliability and cost challenges to the program as of the date of the assessment, and the identification of any potential options for addressing such challenges.”

If approved in the final Act, the report is due by March 16, 2016.

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