Lockheed Martin will deliver up to 190 F-35s in 2025, including both newly built aircraft and jets that have been in storage pending test progress on the Tech Refresh 3 upgrade, company president and CEO Jim Taiclet said this week.
Taiclet also said Lockheed is taking more than $1.9 billion in charges on two secret programs, at least one of which the executive described as vital to the Air Force.
“We continue to expect [F-35] deliveries will exceed the production rate over the next few years, and estimate 170 to 190 F-35 aircraft deliveries in 2025,” Taiclet said during an earnings call on Jan. 29.
That would mark a significant increased from 2024—when Lockheed delivered 110 jets, including 62 in the last quarter—and 2023, when the total was just 98. Deliveries can sometimes exceed annual production because of a variety of factors unrelated to technical problems, in which aircraft built in a previous year are not delivered immediately, a company spokesperson said.
Taiclet said he’s “confident” that production of new F-35s will reach the company’s target of 156 in 2025, reflecting strong demand from both the U.S. and international market. That would indicate the company expects to hand over anywhere between 14 and 34 of the stored aircraft this year.
Neither the Joint Program Office nor Lockheed have disclosed how many aircraft went directly from the production line to storage, but industry officials estimate the final total was around 110 airplanes. The government declined to accept the jets at the time because they were built using Tech Refresh 3 hardware and software, which had not been fully tested when production of that configuration commenced.
The delivery hold was lifted last July, when Program Executive Officer Air Force Lt. Gen. Michael Schmidt determined that the TR-3 software was stable enough for safe operations.
In October, Lockheed said it was delivering about 20 of the deferred-delivery jets per month, in addition to new aircraft coming off the line. Due to sequencing and customer needs, a mix of new and stored jets are being delivered.
The Joint Program Office also said Lockheed is receiving bigger incentive payments on delivered F-35s. The company was being docked $5 million per jet for various reasons involving the hold and TR-3 testing, but that penalty has been lightened to $3.8 million each, a JPO spokesperson said Jan. 29. The company will eventually be able to recoup the withheld funds.
“Lockheed Martin has satisfied criteria to reduce the original withhold by approximately $1.2 million for each aircraft,” the spokesperson said.
Taiclet reported the TR-3 continues “to progress in test flights. We completed qualification testing on a set of key TR-3 capabilities in 2024, and we’re making solid progress on system performance and remaining TR-3 deliverables. We expect to release additional capability this year, with further upgrades to follow.”
He noted that the JPO and Lockheed have reached an agreement in principle on Lot 18 of the F-35, and this brings the F-35 backlog to 408 aircraft. An actual definitized contract is expected “during the first half of 2025,” he added. He did not comment on Lot 19 or 20 negotiations. Lot 19 is believed to have been negotiated alongside Lot 18, and Lot 20 is expected to be the first under a multiyear contract.
Asked whether he thinks the F-35 is well positioned for continued Pentagon funding, Taiclet noted that Israel was able to operate the F-35 with impunity inside Iran, demonstrating its advanced capabilities. He also argued that having the jet in production at a meaningful rate bolsters deterrence against China.
“A part of deterrence theory is that you have to have the capability to make the adversary reconsider an adverse action against you,” Taiclet said. China “has increased production of the J-20—which is their fifth-generation airplane—to over 100 units a year. We’re doing 156. We’re ahead of them. I think if there was a dramatic change in the U.S. order book and production, that might be a signal that would be adverse to maintaining an effective deterrent to them.”
Taiclet continued that “there are some very capable people coming into the administration. They understand deterrence theory. The last thing I think this President and administration would want is to create a period of vulnerability with any of our major adversaries in the next few years. So I feel really confident about F-35 production.”
He further noted that the F-35 has demonstrated an ability to control up to eight drones in a formation, which could be crucial for the Air Force’s Collaborative Combat Aircraft program, and can also do “some classified things” in the area of manned-unmanned teaming in concert with the F-22.
Losses
Lockheed took a charge of $410 million for a secret program in the Aeronautics unit and a $1.4 billion charge on a secret munition being developed by the company’s Missiles and Fire Control unit.
Taiclet said he couldn’t divulge much on the programs, but that the financial situation will improve on the Missiles and Fire Control project.
“Outside of the fixed pricing related to this next phase … the pricing would be open, and we would expect to return to reasonable-type margins” on the program. He doesn’t expect it to “bounce back to [typical Missiles and Fire Control]-like margins, and at that point in time, there still would be kind of a ramp-up that you’ve got to deal with. But certainly the margin profile will get substantially better, and we expect this to be a long-lived program based on the technology and the value to the U.S. government.”
He added that based on his experience as a former Air Force pilot, “I can assure you, this is something they will want.”
Industry experts speculated that the program in question may be the AIM-260 Joint Advanced Tactical Missile (JATM), the successor to the AIM-120 AMRAAM. The JATM—a very long-range air-to-air missile meant to restore parity with China’s long-range missiles—was supposed to become operational in 2022 or 2023, but the Air Force has steadfastly resisted providing any public information about its progress. Service officials have only acknowledged that the weapon entered testing in 2023.
Two years ago, then-vice chief of staff for plans and programs Lt. Gen. Richard G. Moore said an uptick in purchase of AMRAAMs in the fiscal 2024 budget request did not signal a problem with JATM. That budget, he said, included “some facilitization money that will help us get to JATM faster. Once we can start procuring it, we’ll want to get to quantity as fast as we can.”
Industry sources said the other classified program on which Lockheed took a charge may be an advanced drone for surveillance.