The Air Force turns to Boeing for a $ 9.2 billion training aircraft contract

Boeing won a $ 9.2 billion deal for the construction of the Air Force's next fleet of combat training aircraft, the Defense Department said Thursday.

The service plans to purchase approximately 350 Boeing T-X aircraft to replace its T-38C Heels, in service for 57 years. The contract provides for the aircraft to be ready for full operational deployment by 2034.

In a statement, Air Force Secretary Heather Wilson praised the cost savings from the price, noting that initial estimates had set the cost of the program at nearly $ 20 billion. The top three candidates for this award had integrated international design partners, with Swedish, Italian and Korean joint ventures vying for this opportunity.

"This new aircraft will provide the advanced training capabilities we need to increase the lethality and efficiency of future Air Force pilots," Wilson wrote. "Thanks to the competition, we will save at least $ 10 billion on the T-X program."

For the Arlington Boeing-based defense sector, the award rewards a series of amazing victories.

Although Boeing remains a leader in the commercial aircraft sector, it has been overwhelmed by recent competitors in the defense market. Lockheed, the maker of the F-35 joint strike fighter, is the world's largest defense supplier, with $ 50 billion in 2006, compared to $ 23 billion for Boeing. Investors saw Boeing's loss to Northrop Grumman for the opportunity to build the B-21 bomber in 2015 as a major setback.

But Boeing has won a string of victories over the past month, earning positions on major military programs that should hold his finances for decades. In late August, the company secured $ 805 million in funding for the Navy's MQ-25, a new-generation UAV designed to refuel in-flight combat aircraft. Then, this week, she won a $ 2.4 billion contract to replace the aging Air Force UH-1N helicopters.

Boeing was the only competitor to design a plane from scratch, teaming up with Swedish automaker Saab on this project. This approach may have contributed somewhat to the issue: if the Air Force had flown with the aircraft of another company, Boeing would have injected millions of its own research and development capital. development in the project without any reward.

With Thursday's victory, the company's leaders can breathe a sigh of relief.

"Today's announcement is the culmination of years of unwavering focus from the Boeing and Saab teams," said Leanne Caret, Executive Director of Boeing's Defense Unit, in a statement. Caret took over the company's defense business in 2016 as part of a broader reorganization aimed at streamlining the company's operations, removing layers of senior management.

The T-X contract "is the direct result of our joint investment in the development of a system focused on the unique needs of the US Air Force. We expect T-X to be a franchise program for most of this century, "she wrote.

The other major competitors had both launched modified versions of older aircraft.

Lockheed Martin and Korea Aerospace Industries have teamed up to offer the T-50A, which has already been used to train pilots in Korea, Indonesia, Thailand, the Philippines and Iraq. And Leonardo DRS, a US subsidiary of an Italian defense manufacturer, has proposed a modified version of one of its older models of the T-100 trainer.

"We were disappointed to learn that the US Air Force did not choose our offer," said a spokesman for Lockheed Martin Thursday. "We think we have come up with a very solid solution and wait for the client's account to hear more details about the decision."

Analysts were skeptical that the Air Force would save $ 10 billion with this award. The total cost of the program was estimated at $ 16 million to $ 19 million, which means that Boeing agreed to build the aircraft for about half of what was originally planned for the project.

Such a substantial saving is almost unknown in military procurement, suggesting that the program could possibly be subject to cost overruns. Other worried air force capabilities by lowering the price so low.

"When a military service says it has saved $ 10 billion, you have to wonder what it took out of the device," said Loren Thompson, an analyst at the Boeing-funded Lexington Institute.

The Air Force's decision to replace the aging training equipment is long overdue. The new aircraft will replace the T-38C Talon, developed by Northrop Grumman more than half a century ago.

The program was first developed in 2009 policy documents, but a request for proposals was only published in 2016. A 2016 study found that only 60% of the fleet T-38 Air Force service efforts to address a persistent shortage of pilots.

Dave Deptula, a retired Air Force General who is the Dean of the Mitchell Institute for Aerospace Studies, described the T-38 as "a great model for the geriatric air force we have now." since.

"This price is about 30 years late," he said. "It's amazing that more than T-38s do not fall from the sky."

Richard Aboulafia, an analyst at the Teal Group aeronautical consulting firm, said the T-X could be the "latest training aircraft of this type."

"If the history of the T-38 provides guidance, the latest T-Xs could still be in service by 2090," wrote Aboulafia in a recent Forbes blog.