Lockheed says has plan to catch up on F-35 deliveries by year-end

By Andrea Shalal

WASHINGTON (Reuters) - Lockheed Martin Corp (LMT.N) on Monday confirmed that it had delivered just 22 of 36 F-35 fighter jets promised to the U.S. government this year, but had a plan to complete work on the remaining 14 warplanes over the next two months.

"We are not giving up on delivering 14 more aircraft this year," Lockheed spokesman Mike Rein told Reuters when asked about delays in deliveries. "We'll get there."

A source familiar with the $399 billion (246.94 billion pounds) Joint Strike Fighter program, the Pentagon's costliest weapons project, said slower-than-expected deliveries had sparked concern about whether Lockheed would meet its delivery target of 36 jets for the full year. The company could lose incentive fees if it does not, said the source, who was not authorized to speak publicly.

The Pentagon's F-35 program office had no immediate comment on the issue.

Rein said 12 of the 14 remaining airplanes were on the flight line conducting engine run and flight operations, and had completed final finishes and signature testing. The remaining two jets would complete final finishes by November 3, he said.

Two of the jets on the flight line had already completed their acceptance flights, and were now being prepared for acceptance by the U.S. government, he said.

Testing and deliveries of the F-35s had been slowed by a three-week fleetwide grounding due to an engine issue that first emerged in June, and also by increased paperwork associated with the shift from the fifth to the sixth batch of jets, Rein said.

But the company has faced similar challenges in the past. In December 2012, Lockheed redoubled its efforts and delivered nine jets to the U.S. government.

Separately, Lockheed and Pentagon officials have been working to finalise a contract valued at over $4 billion for an eighth batch of jets and ensure it has the support of the various international partners affected.

The eighth batch of 43 jets is due to include aircraft for the U.S. military, Italy, Israel, Norway, Britain and Japan. An agreement was expected weeks ago, but is now likely to be announced last this week or early next.

(Reporting by Andrea Shalal; Editing by Diane Craft)