U.K., Israel Expand F-35 Orders Despite Costs, Delays
Lockheed Martin's (NYSE:LMT) F-35 might be over overbudget and behind schedule, but militaries around the world are still eagerly ordering the stealth jet.
On Tuesday the U.K. announced an agreement in principle to order four additional F-35s. A formal deal will be announced in a few weeks, according to Britain's Ministry of Defense, bringing the total order up to 14 jets. Delivery is expected starting in the middle of 2016.
Lockheed shares rose 0.2% to 183.44 soon after the opening bell in the stock market today.
Defense spending in the U.S. and Europe has been falling, but the rise of the Islamic State terrorist group and trouble in Ukraine could reverse the trend.
Israel also has plans to buy more F-35s. According to Israeli defense sources cited by Reuters, Israel wants a second batch of 25 planes, bringing their total order to 44.
The sources said the deal still needs approval by a government panel.
Israel is given $3 billion in military aid from Washington each year and spends most of it on U.S. defense products.
In September, Lockheed said the F-35 will be ready for combat missions next year despite some technical issues, including an engine fire, and militaries are eager to get their hands on the top-of-the-line plane.
South Korea agreed last month to pay $7 billion for 40 F-35s after rejecting a cheaper bid for Boeing(NYSE:BA) B-15 fighter jets.
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