...but the price looks more horrible with every budgetupdate...
Yes, well, the cost battle is already lost and cannot now be recovered. The programme in-service dates are similarly already in over-run too so the only remaining issue is whether the aircraft meets its performance targets.
Having got this far, the F35 programme can only succeed on capabilities if time and money continue to be expended on development. If the budget were now curtailed, it would be at the expense of some of the performance capabilities that caused people to buy it in the first place. You would end up with a still very expensive aircraft that did not do all that you wanted it to do. It's possible this would not be as capable as the planes it is intended to replace.
The alternatives as I see them are:
1. Cancel now - and it seems this is already in the
too big too fail category or it would not have got this far.
2. Accept more cost and time over-runs and continue development work until you get the capabilities you want.
3. Reduce development funding and accept reduced capabilities which will need additional in-service upgrade expenditure to get it to where you need it to be. (This happens on most programmes anyway.)
While the Americans determine which of the above they opt for (looks like Option 2 to me, with a
caveat on the B for now), other customers have to decide if the wait and cost and assumed capabilities are still worth it.
The UK's position has been complicated by the fact that the F35 and the carriers are intertwined such that the decision about each depends on the other. Not where you want to be, but that's exactly where we are.
Customers for the A will still have runways and various alternatives to fly off them whatever happens. Italy may be vulnerable to cancellation of the B but in terms of decisions, they have none to make -
Cavour will operate F35B or helicopters, there is no CATOBAR option. The USN can get by with Super Hornet instead of F35C, with it's putative successor pencilled in around 2025(?), and the Marines making do with AV8B's, prolonged by the UK Harrier purchase.
My prediction for the UK's eventual position is unaltered. The current government will fudge decisions until the 2015 SDR when the carriers will get dumped (as far as fixed wing operations are concerned anyway) as being unaffordable. This will decouple aircraft choices from carrier requirements and so the B or C choice will then become A, B, something else, or nothing. This decision will be deferred until around 2020 when some of the risks and uncertainties on F35 will be clearer. Typhoon and Tornado will carry the load until 2025, with a possible capability gap appearing post-Tornado retirement until it's replacement becomes available.
(And just to be clear, my predictions are what I think will happen, not necessarily what I would choose to happen in better times.)