Bloomberg News

Lockheed Martin Girds for Combat Jet Choices as Dutch Back JSF

September 20, 2013

Lockheed Martin Corp. (LMT:US) is setting its sights on Denmark as the next prospective European buyer of the F-35 Joint Strike Fighters as the world’s largest defense company seeks to replicate the sales success of its F-16.

Denmark, which participated in the F-35’s development phase, will initiate a fighter competition toward the year’s end, and a decision is likely in 2014, Steve O’Bryan, the company’s program vice president said in a telephone interview.

The Netherlands committed this week to buying the F-35, the world’s most expensive weapons program, joining Norway in recreating a group of European states that jointly bought F-16s in the 1970s. Denmark and Belgium rounded out the partnership.

“This is a huge win for the program and another statement of support,” O’Bryan said. “The F-35 is well on its way to becoming the next NATO fighter just like the F-16.”

In Denmark, Boeing Co. (BA:US) is looking to offer the F/A-18, Saab AB (SAABB) its Gripen fighter, and the Eurofighter Typhoon consortium that includes BAE Systems (BA/) and European Aeronautic, Defence & Space Co. Denmark is expected to buy about 30 jets.

Development issues and Pentagon concerns over cost of the jet slowed international commitments to the Lockheed Martin plane built in conjunction with Northrop Grumman Corp. (NOC:US) and BAE Systems Plc. As costs have come down, opposition in countries such as the Netherlands to buying the jet has eased.

Falling Costs

The Dutch commitment, which came after the country bought two test planes, is not without its setbacks. The country trimmed its purchase to 37 planes from an initial plan to procure 85. The government said it may order additional aircraft in future, “financial parameters” permitting.

“Costs are coming down rapidly” below government estimates, O’Bryan said.

The first operational Dutch F-35s are due in 2019. The country, whose purchase still needs to be ratified by parliament, joins Norway and Italy among European states committed to buying the aircraft, with Israel and Japan among other foreign buyers.

The U.K., which has already bought test planes, will make a decision on buying the first 12 to 14 operational fighters this year, Philip Dunne, the country’s defense equipment minister said last week. Costs of the plane have come down faster than expected, he said.

The U.K., which will deploy the aircraft on its new aircraft carriers from about 2020, has not said how many JSFs it plans to buy overall beyond an initial commitment of 48 fighters.

Norway and the U.K. have agreed to cooperate on their maintenance and use. The Norwegian government said Sept. 17 it would seek to extend that cooperation to the Netherlands.

Those relationships should help lower usage costs across Europe, which would be further aided by U.S. F-35s jets deployed in the region, O’Bryan said. It would clear the way for a sharing of parts and experience.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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Companies Mentioned

  • LMT
    (Lockheed Martin Corp)
    • $196.84 USD
    • 0.41
    • 0.21%
  • BA
    (Boeing Co/The)
    • $131.63 USD
    • 0.39
    • 0.3%
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