Capt. Brad Matherne inside an F-35A Lightning II before a training mission in Nevada in April 2013.
Photograph by Brett Clashman — U.S. Air Force
By Clay Dillow
March 18, 2015

The $400 billion F-35 Joint Strike Fighter has earned a reputation for coming up short on program requirements. But even with expectations for the program significantly lowered by a string of poor program reviews, two recent reports from the Government Accountability Office (GAO) and the Department of Defense’s own Director of Operational Test and Evaluation paint a dismal picture of an aircraft that continues to fail the baseline requirements for combat fighter jets.

That’s bad news for the Pentagon but it could be good news for Boeing (BA). A vocal contingent of Navy brass continues to call for the purchase of more Boeing-built F/A-18 Super Hornets and E/A-18 Growlers to fill a capability gap that by all indications won’t be filled by the Navy’s F-35C anytime soon.

It’s not difficult to see why the Navy might want to hedge the Pentagon’s bet on the F-35. According to the GAO, the F-35 program—already plagued by cost overruns and delays—added an additional $4.3 billion to its overall price tag last year. Originally slated to join the combat fleet in 2012, the same report estimates the Marine Corps. variant won’t reach initial operating capability—IOC in industry parlance—until this summer at the soonest. The Navy’s aircraft carrier-capable version, the F-35C, won’t reach IOC until at least 2018. And keep in mind that IOC describes the minimally deployable form of a capability or technology, not a fully developed combat platform.

A Department of Defense report reveals further technical glitches, describing an aircraft suffering from both software and hardware issues. Among them: engine problems that compromise safety and for which no design fix exists; software capability failures, fixes for which have been deferred to later development blocks; wing design issues that have existed for six years without being adequately addressed; and a lingering fire risk due to the vulnerability of the aircraft’s fuel tank.

The report also accuses the program of papering over these problems, failing to count certain failures or re-categorizing them to massage program stats. Taken together, the two reports make for a headline that should surprise absolutely no one at this point: The F-35 is years away from being the unparalleled next-gen fighter jet promised by the Pentagon.

With the timing of the F-35C’s combat readiness anything but certain, the Navy is looking at plugging holes in its air wing with existing platforms, namely the Super Hornet and its cousin, the E/A-18 Growler. “We have a shortfall in Super Hornets, we do,” Adm. Jon Greenert, chief of naval operations, told Congress earlier this month. “And we’re going to have to work our way through here in order to manage it.”

That’s really good news for Boeing’s combat jet business, which has flagged since it lost the Joint Strike Fighter contract to Lockheed Martin (LMT). As things stand now, Boeing is slated to shutter its F/A-18 production line sometime in 2017. If the Navy decides to throw some more money at Boeing for a few more Super Hornets or Growlers, it could extend the production line for another year or two, says Richard Aboulafia, senior vice president for analysis at aerospace and defense consultancy Teal Group. With several international buyers expected to issue contracts for fighter jets toward the end of the decade—Kuwait, Belgium, Denmark, and the UAE among them—a lifeline from the Navy could be the bridge to another contract from overseas, keeping Boeing’s combat jet business alive into the next decade.

That’s a market Boeing would very much like to remain a part of. And with the F-35 failing its routine checkups, the odds are improving that it will get the chance.

“I can’t imagine Boeing walking away [from this market] unless Congress and the Navy give them nothing,” Aboulafia says. “And all the noises that Congress and the Navy are making say that something will be provided.”

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