Lockheed Martin will face payment delays of up to $868 million due to halting F-35 Lightning II deliveries for nearly a year

Lockheed Martin announced last week that deliveries of the fifth-generation F-35 Lightning II fighter jets will not resume until the second quarter of 2024. This means that the largest US defence contractor will face a huge payment delay.

Here's What We Know

The US Department of Defence will not pay approximately $7 million for each fifth-generation fighter jet with Technology Refresh 3 (TR-3) hardware that will go into storage. Deliveries of the F-35 Lightning II were halted in July 2023 due to software problems. Thus, the pause will last for 9-11 months, although the company wanted to resolve all problems by the end of 2023.

The upgrade will increase the fifth-generation fighter's processing power by 37 times and memory capacity by 20 times compared to the current version of the F-35 Lightning II. Lockheed Martin plans to have 52 aircraft in storage by 31 December 2023. In 2024, the company wants to produce 12 fighter jets a month.

If the pause lasts until the end of the second quarter of 2024, Lockheed Martin will have 124 fifth-generation aircraft in the warehouse. If the Pentagon allows the company to resume deliveries from 1 April, that amount will be $616 million for 88 fighters.