October 28, 2014 / 12:18 PM / 3 years ago

Israel to buy 25 more F-35 Lockheed stealth fighters: sources

JERUSALEM/WASHINGTON (Reuters) - Israel plans to buy a second batch of Lockheed Martin’s F-35 stealth fighter jets, bringing its total number on order to about 44, Israeli defense and U.S. sources said on Tuesday.

Workers can be seen on the moving line and forward fuselage assembly areas for the F-35 Joint Strike Fighter at Lockheed Martin Corp's factory located in Fort Worth, Texas in this October 13, 2011 handout photo provided by Lockheed Martin. REUTERS/Lockheed Martin/Randy A. Crites/Handout

Israel bought 19 F-35s for $2.75 billion in 2010, a deal that included options for up to 75 planes. Israeli Defence Minister Moshe Yaalon, visiting the United States last week, placed a preliminary order for about 25 more F-35s, the defense sources said without elaborating on cost.

The first batch of planes is scheduled to arrive in Israel between 2016 and 2018, the sources said, noting that the second purchase needs final approval by an Israeli government panel.

Israel will benefit from various efforts under way by Lockheed and engine maker Pratt & Whitney, a unit of United Technologies Corp to lower the cost to produce the jets, according to U.S. sources familiar with the plans.

Israel had hoped to buy as many as 31 jets in the second batch, and could increase its order from 25 if the price comes down further, said one U.S. source, who was not authorized to speak publicly since the order has not yet been finalized.

The new order of jets would be delivered beginning in 2019, with terms of the contract to be finalized by year-end, said the sources.

The U.S. embassy in Israel had no immediate comment, and the Pentagon’s F-35 program declined comment.

Lockheed said it would be inappropriate to comment since arms sales are handled on a government-to-government basis.

In July, Lorraine Martin, Lockheed’s F-35 program manager, told reporters that $170 million of industry investment in cost reduction initiatives will cut the cost of each F-35 fighter jet to about $80 million, including an engine, by 2018.

Washington gives Israel some $3 billion in annual defense grants, most of which it spends on U.S. products. Israeli companies, including Elbit Systems Ltd. and state-owned Israel Aerospace Industries (IAI), are contributing technologies to the F-35 Joint Strike Fighter program.

Writing by Dan Williams and in Jerusalem and Andrea Shalal in Washington; Editing by Jeffrey Heller, Louise Ireland and David Gregorio

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