Pentagon Raises F-35 Acquisition Estimate $51 Billion After Years of Declines

The Pentagon now estimates that developing, modernizing and acquiring the planned U.S. F-35 fleet will cost $536.2 billion, up $51 billion from the $485.2 billion listed in its previous 2023 assessment. The roughly 10.5% revision reverses the program’s long cost narrative: expanding production once drove aircraft prices downward, but current estimates now reflect more expensive production and a widening package of technical upgrades.

The latest acquisition assessment, reported August 28, covers planned U.S. aircraft and engines as well as development spending. It does not represent the much larger lifetime cost of flying, maintaining and supporting the fleet. Of the $51 billion increase, approximately $19 billion comes from higher research, development, test and evaluation costs, which reached $106.6 billion. Procurement accounts for nearly $32 billion more.

Inflation does not explain the full increase

The obvious comparison is with the F-35’s earlier price decline. The conventional F-35A cost more than $250 million in the first low-rate production lot before its recurring flyaway price fell to $77.9 million in Lot 14. The short-takeoff and vertical-landing F-35B reached $101.3 million in that lot, while the carrier-capable F-35C reached $94.4 million.

Average nominal flyaway prices across Lots 15 through 17 subsequently rose to $82.5 million for the F-35A, $109 million for the F-35B and $102.1 million for the F-35C. Those figures were approximately 6% above Lot 14 for the F-35A and 8% higher for each of the other variants. Because the prices come from different years, however, they cannot by themselves separate inflation from underlying production-cost growth.

The stronger comparison is the Pentagon’s Unit Recurring Flyaway projection in constant 2012 dollars. This measure strips out inflation and estimates the recurring expense of producing an aircraft and its engine. It rose for all three versions: from $72.7 million to $78 million for the F-35A, from $99.8 million to $110.3 million for the F-35B and from $87.7 million to $93.4 million for the F-35C.

These are program projections rather than contracted prices for a particular production lot. Even with that limitation, the direction matters. Inflation-adjusted increases across all three variants indicate that the revised bill cannot be attributed to a change in the dollar’s purchasing power alone. The Pentagon also cited costs observed in recent production contracts, supplier expenses, production support and modernization requirements.

A mature airframe is absorbing new systems

The F-35 being priced today is not technically identical to the aircraft that moved down the production learning curve. Technical Refresh 3 introduces new computing hardware needed to support Block 4 modernization. Block 4 also brings additional sensor, software and other capability work, while the planned APG-85 electronically scanned radar will replace the APG-81 in future aircraft.

Block 4 illustrates how modernization changes the economics of a high-rate aircraft program. Its development was initially planned around 66 capabilities at an estimated cost of approximately $10.6 billion. Subsequent estimates increased that figure to roughly $16.5 billion, and the Pentagon restructured the effort to prioritize a smaller group of critical capabilities. That does not make every dollar of the $51 billion revision a Block 4 expense, but it shows why comparisons with earlier production lots need to account for changing aircraft content and continuing development.

The propulsion and thermal-management side adds another layer. Pratt & Whitney is developing an Engine Core Upgrade for the F135, while the program is also planning a Power and Thermal Management Upgrade. These efforts are intended to support the electrical-power and cooling demands created by newer computing and mission systems. A contract modification worth up to $240.8 million continues Engine Core Upgrade development through March 2028, although flight testing is not expected until around 2030.

Recent contracts provide only part of the picture

Lockheed Martin received a $24.29 billion contract covering 296 aircraft in production Lots 18 and 19, with engines contracted separately. That total should not be divided by 296 and treated as a complete per-aircraft price. The engine awards sit outside the airframe contract, the three F-35 variants have different costs, and the Pentagon has not publicly provided directly comparable variant-specific flyaway prices for those lots.

The $536.2 billion estimate is therefore neither a bill already paid nor a new sticker price for one fighter. It is the Pentagon’s updated projection for the full acquisition program, incorporating development, modernization and expected procurement costs. Its most consequential signal is the constant-dollar increase across every F-35 version: production scale is no longer reducing estimated recurring costs fast enough to offset the expense of building a more capable aircraft.

By David Whitaker — Associate editor for AMI’s aerospace and drone systems desk, translating flight systems, aircraft programs, spaceflight, and UAV developments into accessible technical stories.