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Pentagon to ask for only 34 Lockheed F-35s in 2015 budget: comptroller

By Andrea Shalal

WASHINGTON (Reuters) - The U.S. Defense Department will request 34 Lockheed Martin Corp F-35 fighter jets in its 2015 budget request, eight fewer than initially planned, Pentagon Comptroller Robert Hale told an industry conference on Tuesday.

Hale said the decision reflected a postponement of some F-35 purchases because of budget pressures, not concerns about the performance of the $392 billion program, the Pentagon's biggest arms project.

"It's an affordability issue, not performance," Hale told a conference hosted by McAleese and Associates, a consulting firm, and Credit Suisse.

Hale said the program, which is nearly 70 percent over budget and years behind schedule, was showing improvement. "It's starting to get on an even footing," he said.

Hale declined to give details about planned purchases in coming years, but said production of the Lockheed fighter jets would be increasing. Defense officials say the military services still plan to buy a total of 2,443 F-35 fighter jets, despite the latest postponement of orders.

Frank Kendall, the Pentagon's chief weapons buyer, told the conference that budget pressures prevented funding for all the aircraft planned in fiscal 2015, which begins October 1.

"We can't ... ramp up as much as we'd like to in FY15, but we're going to start on that path," Kendall said.

Air Force Lieutenant General Chris Bogdan told the conference that orders from foreign countries would help increase the production rate of the new aircraft, and would soon account for half of all F-35 orders in a given year.

He said he expected South Korea to order F-35 jets, and said he recently visited Singapore, which was also interested in the new radar-evading plane. "Adding those airplanes ... takes care of any reductions that the services might have," he said.

Deputy Chief of Naval Operations Vice Admiral Joseph Mulloy told conference participants the Navy remained committed to the F-35 programs, although it planned to slow its buy rate and ramp up production later.

Despite the slower purchase rate, he said the Navy still expected to start using the new planes for military operations in 2019, as planned. "We're planning on 2019 for our first squadron," he said.

Turkey is expected to become the ninth country to place a firm order for F-35 jets in coming days, joining the U.S., Britain, Australia, Norway, Italy, the Netherlands, Israel and Japan.

Sources familiar with the budget plans said the department could add funding for several F-35 jets to the supplemental war funding request to pay for some older Marine Corps Harrier jets destroyed in combat.

Kendall declined to give any details since defense officials are still working on the war spending request. But he suggested that F-35s could be potentially be used to replace destroyed Harriers.

"We're looking at ... what's appropriate. We want to take advantage of that as much as we can," he said. "The Marines had some Harriers destroyed. They need a replacement aircraft. What's the logical replacement? It's not more Harriers."

Acting Deputy Defense Secretary Christine Fox told the conference that war funding budgets were not intended to pay for new equipment, although she conceded that the Pentagon had been "on both sides of that argument" in recent years. She said there was an argument to be made that if equipment was destroyed, it could be replaced by new equipment.

"It's a grey area. We have this debate internally all the time," Hale said, when asked about the possibility of funding F-35s in the war budget. He said there was a precedent, since some major weapons systems had been funded through supplemental budgets in the past.

(Additional reporting by Doina Chiacu; Editing by Phil Berlowitz and Kenneth Maxwell)

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