(Reuters) – Lockheed Martin Corp (LMT.N) said that it hit its 2017 target to deliver 66 F-35 fighter jets to the U.S. and its allies last week, despite production problems as the defense contractor built 40 percent more jets this year.
In September and October, the U.S. Defense Department halted shipments of F-35s for 30 days after a production error allowed corrosion to form around fasteners attaching body panels to the airframe.
It was the latest of several production issues that have arisen in the Pentagon’s most expensive weapons program.
The F-35 is key for Lockheed, accounting for about a quarter of its total revenue. During the third quarter, sales at Lockheed’s aeronautics business increased 14 percent to $4.7 billion, pulled higher by F-35 sales.
“I definitely see growth opportunities for the F-35 program and expect the program to grow much like the F-16 did, as countries look to recapitalize their fighter fleets,” said Jeff Babione, the head of Lockheed’s F-35 program.
The governments of Belgium, Finland, Germany, Spain, Switzerland, the United Arab Emirates and others have been eyeing a purchase of the stealthy jet as potential new customers.
PRODUCTION DELAYS
Despite the consistent growth, the F-35 has been widely criticized for being too expensive, including by U.S. President Donald Trump and other U.S. officials, who have also pointed to numerous production delays and cost overruns.
A quarter of the operating F-35 fleet was temporarily grounded this year because of problems with pilots’ oxygen supplies.
The U.S. Government Accountability Office also published a report this year detailing a shortage of spare parts that could plague the F-35 program for several years.
The supply chain is already working at peak capacity.
Lockheed, the prime contractor, and its partners, including Northrop Grumman Corp (NOC.N), United Technologies Corp’s (UTX.N) Pratt & Whitney and BAE Systems Plc (BAES.L), have been working on building a more cost-effective supply chain.
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