The Pentagon cites inflation, rising raw material costs, and supply chain disruptions as reasons for a „significant price increase” in Lot 18 F-35 fighter jets, impacting ongoing negotiations with Switzerland.
Cost Dispute with Switzerland
This price surge threatens Switzerland’s planned purchase of 36 F-35As, with a defense official stating that F-35 program costs, particularly for airframes and engines, have exceeded initial estimates outlined in Switzerland’s 2022 Letter of Offer and Acceptance (LOA).
$610M Price Increase
The official attributed the rising costs to inflation, global raw material price hikes, and supply chain disruptions, projecting a $610 million price increase for Switzerland’s 2022 F-35 LOA due to price increases in the Lot 18 production contract.
Negotiations Underway
The JPO and Lockheed Martin are currently negotiating Lot 18, with an $11.8 billion undefinitized contract already awarded to initiate production. It remains unclear if rising prices were factored into this contract, issued before the Trump administration’s global trade war.
Airframe Costs Stable with Inflation Adjustment
A JPO spokesperson stated that the cost per aircraft varies based on quantity, variant mix, and economic forces, adding that the Lot 18 air vehicle cost is consistent with Lots 15-17 when adjusted for inflation.
Swiss Government Committed to F-35 Procurement
While the Pentagon estimates a $610 million price increase, Swiss officials project a higher range of 650 million to 1.3 billion Swiss francs (roughly $807 million to $1.6 billion), accounting for domestic cost increases, taxes, exchange rates, and increased infrastructure spending at Swiss airbases. A Swiss government spokesperson emphasized their commitment to the F-35A procurement, working closely with U.S. counterparts.
Fixed Pricing Challenges
Switzerland aims to fix the deal at 6 billion Swiss francs (over $7.4 billion), but the Swiss government acknowledged that the final price depends on factors like U.S. inflation, commodity prices, and tariffs. Switzerland faces a 39% duty due to Trump tariffs, prompting some lawmakers to call for rejecting the F-35 buy.
First Delivery Expected in 2027
Switzerland’s first F-35 delivery is anticipated in 2027, with deliveries continuing until 2030. The Lot 18 contract between Lockheed and the Pentagon covers 145 airframes and is expected to be finalized in the second half of this year. The JPO has also issued an over $2.8 billion undefinitized contract for 141 Lot 18 engines.
FY26 Budget Cuts
The Trump administration’s fiscal 2026 budget notably slashed the Pentagon’s own F-35 buy, cutting the Air Force’s purchases essentially in half, though lawmakers have indicated support for restoring some of those aircraft.
