Boeing Wins Contest to Build Air Force Trainer Jets

By Doug Cameron 

Boeing Co. on Thursday secured a hat-trick of Pentagon contract wins after it was awarded a deal worth up to $9.2 billion to build new trainer jets for the Air Force.

The contract to build an initial 351 T-X jets and supply training services is one of the largest defense department programs awarded in recent years, with the work helping sustain engineers and production equipment while the Pentagon considers the next generation of combat aircraft due to come into service in the 2030s.

Analysts had favored Boeing in the long-running contest, expecting the aerospace giant to bid aggressively to secure the future of its main military jet plant in St. Louis and position itself for future aircraft competitions, such as the Air Force's Penetrating Counter Air plan.

Boeing has triumphed in two recent contests to provide refueling drones for the U.S. Navy and helicopters for the Air Force, and its defense arm is on track to increase sales for the first time in four years, but the larger T-X program was viewed by analysts as a key test of its competitiveness.

Boeing pitched an all-new plane built in partnership with Sweden's Saab AB.

The company beat out competition from teams led by Italy's Leonardo SpA and Lockheed Martin Corp, both offering versions of jets designed overseas and used by foreign militaries.

Analysts expect the losing bidders to appeal, given the aggressive level of Boeing's bid. The $9.2 billion contract award compares with the ceiling of $16.3 billion placed on the program by the Air Force at the start of the contest.

The new planes will replace jets approaching an average age of 50 years used to train Air Force pilots. The old planes have become expensive to maintain and lack the capabilities of planes such as the Lockheed Martin-built F-35s that are becoming the centerpiece of the Air Force combat fleet.

Write to Doug Cameron at [e-mail]

(END) Dow Jones Newswires

September 27, 2018 17:11 ET (21:11 GMT)

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