The US Department of Defense is close to a deal with Lockheed Martin for roughly 375 F35 fighter jets, to be delivered over three years. The deal is closing as analysts are predicting there will be price increases for the most common version of the jet due to a mixture of inflation and fewer orders.

Currently the fifth generation stealth fighter jet costs about $79 million per unit, a far cry from the $221 million which the first jet to come off the line in 2007 had cost.

Negotiations had reached a standstill in recent weeks over data-rights issues. But now sources say a midday Monday meeting could produce a handshake decision on both price range and quantity. If such an agreement happens, it would take weeks to months to finalize the deal, which is expected to be in the range of $30 billion.

Lockheed had first broached the possibility of price increases during the pandemic, as demand declined, economies of scale were lost, and supply chains went on the skids. A pre-pandemic forecast of this deal predicted 485 jets would be bought, but it has closed about 22% lower, which will affect the overall price per jet.

The F35 is available in three versions, the A version which is designed for the Air Force and US allies, the B version with Vertical Takeoff and Landing capability, and the C version which is designed for carrier landings.

The last Pentagon block buy was in 2019, and was for 478 units, allowing Lockheed to reduce the price by about 8% per unit by purchasing larger quantities of materials and components.