Boeing Just Beat Out Lockheed Martin—Again—for a Gigantic Deal to Replace Air Force Training Jets
Boeing and Saab (SAABF) have won an enormous contract with the U.S. Air Force, worth as much as $9.2 billion.
The initial deal is for 351 T-X training jets, along with 46 flight simulators and other ground equipment. The new planes will replace an extremely aged set of training jets, in particular the Northrop T-38, which was launched all the way back in 1961.
The losing bidders included Lockheed Martin and Italy’s Leonardo and, according to the Wall Street Journal, those companies are likely to appeal the decision. Boeing bid very aggressively, considering that the Air Force’s cap for the tender was $16.3 billion.
The T-38 replacement program has been under development for 15 years now.
“Today’s announcement is the culmination of years of unwavering focus by the Boeing and Saab team,” said Leanne Caret, the head of Boeing’s defense, space and security division. “It is a direct result of our joint investment in developing a system centered on the unique requirements of the U.S. Air Force. We expect T-X to be a franchise program for much of this century.”
The company said more than 90% of its T-X production would take place in the U.S., supporting over 17,000 jobs across 34 states. According to Defense News, the $9.2 billion figure for the new deal would come into play if the Air Force decides to buy 475 planes.
Boeing (BA) won a $3.9 billion contract earlier this year to build two new Air Force One planes for the president. And in the last month, it has scored more victories including an $805 million Navy tanker contract and a $2.38 billion deal to replace the Air Force’s Huey helicopters.
However, while it lost out on the Air Force deal, Lockheed Martin (LMT) did have a spot of good news this week. On Wednesday evening, the German parliament green-lit the purchase of Lockheed’s C-130 Hercules transport aircraft for $1.14 billion.