F-35 Procurement Halved as Pentagon Reprioritises Budget

Arabian Post

a day ago

Pentagon officials have trimmed the U.S. Air Force's F-35A fighter jet order dramatically, requesting just 24 aircraft in fiscal year 2026—cutting it by half from the previously projected 48 jets. The revised procurement proposal, submitted to Congress, seeks approximately $3.5 billion for the jets and an additional $531 million set aside for advance materials procurement.
This downsizing is part of a broader strategy by the Department of Defence to shift funding toward emerging defence priorities and cost-saving measures. The Navy and Marine Corps are also affected: the Navy's carrier variant request has dipped from 17 to 12 aircraft, and the Marine Corps' numbers have been reduced by two.
Analysis indicates that delays tied to the F-35's TR-3 software upgrade have created bottlenecks in deliveries. Lockheed Martin paused shipments for software integration and sustainment testing; Congress also withheld acceptance of about 20 jets until those issues are resolved. Despite these setbacks, Lockheed still managed to deliver 110 F‑35s globally in 2024, and the F‑35 programme continues to represent approximately 30 percent of the company's annual revenue.
Defence analysts describe the halving of F‑35A orders as both a fiscal recalibration and a window of opportunity. One investment commentary noted that while the short‑term cut may rattle markets, the production backlog and sustained international demand—especially among NATO allies—could help cushion Lockheed's pipeline. Already, partner nations such as the UK, Italy and the Netherlands have active procurement plans, while recent buyers like Germany, Greece, Singapore and Romania are proceeding with their orders.
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The shift comes amid a wider Pentagon push to realign procurement budgets; recent directives aim for an 8 percent reduction in total defence spending over five years. Cuts will support new programmes such as the F‑47 sixth‑generation fighter, Collaborative Combat Aircraft drones, hypersonic weapons and border security initiatives.
House appropriations hearings have highlighted this transition, with Pentagon leaders confirming investment of more than $4 billion in next‑generation combat platforms in fiscal 2026, including funding for the F‑47 and the CCA 'loyal wingman' drones. Secretary of Defence Pete Hegseth described these as vital to maintaining air dominance in increasingly contested environments.
Lockheed Martin has urged stakeholders to view the F‑35 as a long‑term strategic asset. The company's finance chief told investors that a final contract is anticipated once TR‑3 upgrades are cleared, signalling confidence in the jet's future viability.
International sales remain central. With over $176 billion in export backlog at the end of 2024, Lockheed's reliance on foreign partners has grown. The U.S. share of global F‑35 orders has dropped from 70 percent a decade ago to about 55 percent today. Advocates argue that the jet's fifth‑generation stealth and interoperability continue to give it a unique edge over systems like Saab's Gripen E or Dassault's Rafale.
Still, risks persist. Continued TR‑3 roll-out delays could erode confidence, and broader fiscal dynamics—such as the fate of reconciliation spending and geopolitical tensions—could further influence procurement.
Meanwhile, the U.S. Navy is forging ahead with its own next‑generation development: opting out of Lockheed for the F/A‑XX carrier fighter competition in favour of Boeing and Northrop Grumman designs. The Navy will continue to acquire F‑35C jets, purchasing them alongside future carrier‑based platforms.
Budget documents reveal the Air Force intends to allocate $24.8 billion to aircraft procurement in FY 2026. F‑35A purchases form a smaller slice of that pie, with funds also directed to the hypersonic ARRW missile, Boeing's F‑15EX fighters, T‑7A trainers, and KC‑46A refuellers.
In the meantime, Lockheed is focusing on resolving the TR‑3 integration challenges and progressing Block 4 upgrades—critical for retaining export competitiveness and meeting evolving defence needs. Despite reduced U.S. orders, strong international demand and technological advancement keep the F‑35 programme poised for continued relevance.