Boeing Wins $ 9.2 Billion Contract for New Air Force Training Aircraft

WASHINGTON (Reuters) – Boeing Co (PROHIBIT) was chosen to build the US Air Force's next training jet as part of a $ 9.2 billion contract over the life of the program, said Air Force Thursday.

Boeing teamed up with Sweden's Saab AB (SAABb.ST) to develop a new aircraft for the competition, beating Lockheed Martin Corp. (LMT.N) and Leonardo DRS (LDOF.MI).

The Air Force is currently considering buying 351 jet aircraft and 46 simulators. Additional purchase options on the $ 9.2 billion contract, announced for the first time by Reuters, could allow the Air Force to purchase up to 475 jetliners and 120 simulators .

The service expects the first aircraft to be delivered in 2023 with the program to be fully operational in 2034.

In its bid, Lockheed proposed a modified version of its T-50 training aircraft, developed jointly with Korea Aerospace Industries Ltd (047810.KS) while the Italian Leonardo DRS had offered the T-100, a modified version of the Italian aerospace company M-346.

Boeing shares rose slightly after the news, closing at 0.6% to $ 367.38, while Korea Aerospace shares fell more than 24% in Seoul. The company said its group had lost because Boeing's offer was lower.

The Air Force wants to replace its aging fleet of T-38 aircraft, which are almost 50 years old. Analysts said it could eventually buy up to 600 aircraft.

General Arnold Bunch, of the Air Force Assistant Secretary's Office for the acquisition, told reporters that "two-thirds of what we train for the fourth and fifth generation fighters we can not do in the T-38s. "

The conclusion of the contract is important for Boeing, which reorganized its defense business more than a year ago in the hope of a franchise-level victory, such as the following: coach.

The arrival of large defense contracts had been difficult for Boeing, but Leanne Caret, Boeing Defense's CEO, Space & Security since February 2016, helped the company win more contracts.

"Today's announcement is the culmination of years of unwavering focus from the Boeing and Saab teams," Caret said in a statement. "We expect T-X to be a franchise program for most of this century."

The Air Force award came after Boeing struggled to deliver its new KC-46 in-flight refueling aircraft to the Air Force.

In a statement, Saab said the price means that Boeing can now start placing orders with its suppliers, including Saab, but has not yet done so. Saab said more than 90 percent of Boeing's offerings would be made in America, supporting more than 17,000 jobs in 34 states.