Biden Slashes F-35 Jet Order 18%

U.S. President Joe Biden wants an 18% cut in the number of F-35 jets the Pentagon buys next year after Congress' cap on the size of the upcoming defense budget compelled the administration to find savings, two sources familiar with the situation said.

The Pentagon order for Lockheed Martin's (LMT.N), opens new tab stealthy fighter will drop to below 70, down from an expected order of 83, for an estimated $1.6 billion drop in spending on jets.

The drop in F-35 orders could impact the big defense contractor, which earns about a quarter of its revenue from the jet program. International demand for the jets, which cost somewhere between $80 million to about $120 million each depending on the type, remains strong.

Biden's overall defense and national security budget request is expected to be $895 billion, the sources said, compelling deep cuts in a wide range of programs, delays to existing programs and slowing efforts to build weapons stocks depleted by wars in Ukraine and Israel.

Budget negotiations between Defense Secretary Lloyd Austin and the White House's Office of Management and Budget have largely concluded, but the final amount could change before the budget request is expected to be unveiled on March 11, the sources added.

The Pentagon's comptroller declined to comment, and the Joint Program office, which runs the F-35 program, also declined to comment.

Last year, the Pentagon projected it would buy 83 of the stealthy F-35 fighter jets from Lockheed Martin for $9.8 billion.