US President Donald Trump awarded Boeing the contract to build the US Air Force’s most advanced fighter jet on Friday, securing a crucial victory for the company and boosting its stock value.
The Next Generation Air Dominance (NGAD) program will replace Lockheed Martin’s F-22 Raptor with a crewed aircraft designed to operate alongside drones. Trump, the 47th president, unveiled the new jet’s name as the F-47. “We’ve given an order for a lot. We can’t tell you the price,” he told reporters in the Oval Office.
Boeing’s shares surged by 5% following the announcement, while Lockheed Martin’s stock dropped nearly 7% after losing the contract. Trump suggested that foreign sales could follow, stating, “Our allies are calling constantly. They want to buy them also.”
For Boeing, the contract represents a turnaround after struggles in both its commercial and defense sectors. The deal is a major boost for its fighter jet production operations in St. Louis, Missouri. In contrast, Lockheed Martin suffered another setback, having recently lost the bid to build the Navy’s next-generation carrier-based stealth fighter. The company has also faced criticism from the Pentagon over delays in upgrading the F-35.
Reports indicate that Trump recently met with Lockheed CEO Jim Taiclet to discuss the F-35, according to three sources.
The engineering and manufacturing development contract is valued at more than $20 billion, with Boeing expected to receive orders worth hundreds of billions over the program’s multi-decade lifespan. Reuters was the first to report Boeing’s victory.
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“We recognize the importance of designing, building and delivering a 6th-generation fighter capability for the United States Air Force,” said Steve Parker, head of Boeing’s defense division. “In preparation for this mission, we made the most significant investment in the history of our defense business.”
While the plane’s design remains classified, it is expected to feature stealth technology, advanced sensors, and cutting-edge engines.
“Compared to the F-22, the F-47 will cost less and be more adaptable to future threats – and we will have more of the F-47s in our inventory,” said General David Allvin, Chief of Staff of the Air Force. He added that the F-47 will have greater range, enhanced stealth, and improved supportability compared to the F-22.
The NGAD program was developed as a “family of systems” centered on a sixth-generation fighter to counter threats from adversaries such as China and Russia.
Boeing’s commercial operations have faced challenges, including efforts to restore full production of its 737 MAX jets, while its defense sector has struggled with cost overruns and delays in contracts for refueling tankers, drones, and training jets.
“The win is a major boost for the company, which has struggled with cost overruns, schedule delays and execution on other Department of Defense programs,” said Roman Schweizer, an analyst at TD Cowen.
The KC-46 mid-air refueling tanker program has exceeded $7 billion in cost overruns, and Boeing’s fixed-price contract to upgrade two Air Force One planes has resulted in a $2-billion loss.
The company’s passenger jet division has also faced increased scrutiny following a series of crises, including a mid-air emergency in January 2024 involving an Alaska Airlines 737 MAX 9 missing four critical bolts. Boeing reported an $11.8 billion annual loss in January—the largest since 2020—due to problems in key business areas and the impact of a production strike. The Federal Aviation Administration imposed a monthly production cap earlier in 2024.
Lockheed Martin acknowledged the decision but left the door open for further discussions. “While disappointed with this outcome, we are confident we delivered a competitive solution,” the company stated. “We will await further discussions with the US Air Force.”
While Lockheed could challenge the contract award, Trump’s high-profile announcement may discourage public objections from the Bethesda, Maryland-based defense firm.
Boeing’s selection received congratulations from Democratic Senator Mark Kelly, who cautioned, “A program of this size and complexity requires careful oversight to make sure it doesn’t fall behind or have cost overruns.”
Elon Musk, billionaire and presidential adviser, has expressed skepticism about high-end crewed fighters, arguing that cheaper drones may be a more effective alternative.
(Reuters)
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