Boeing, Co (BA) Lands Near $10B Air Force Contract

01 October, 2018, 00:34 | Author: Darnell Patrick
  • U.S. Air Force pilots will soon train for combat with T-X jets and simulators from Boeing

Boeing Co's jet was selected to build the U.S. Air Force's next training jet in a contract worth up to $9.2 billion over the life of the program, a U.S. official said on Thursday.

Boeing will receive a $9.2 billion contract to produce more than 350 T-X trainer jets in addition to simulators and other equipment. This time, it's the Air Force's T-X next-generation advanced jet trainer contract.

The Secretary of the Air Force says the new aircraft will provide the "advanced training capabilities" it needs "to increase the lethality and effectiveness of future Air Force pilots".

The award comes less than a week after the Air Force awarded a Boeing-Leonardo bid the win for the Air Force's replacement of its UH-1 nuclear security helicopters. In a preview of today's announcement, Teal Group analyst Richard Aboulafia said the T-X was the focus of "the last undecided US military aircraft competition for many years to come".

But in the past month Boeing has won a string of major military contracts that should pad its coffers for decades. All undergraduate pilot training bases will eventually transition from the T-38 to the T-X.

Winning the competition was so important to Boeing that management may have effectively written off those costs and put in a low bid to ensure a win, as the company did on the KC-46 aerial refueling tanker for the Air Force.

This is a so-called "indefinite-delivery/indefinite-quantity" contract and under the existing terms, the Air Force could potentially order as many as 475 planes and 120 simulators.

This follows a trend in both Air Force contracts and Boeing's recent string of significant successes in offering aircraft to the US military as a whole.

The original Air Force cost estimate for the program was $19.7 billion for 351 new trainers.

The Air Force took a number of steps ahead of the T-X program to boost competition and buy down risk, service acquisition officials told reporters September 27 at the Pentagon.

Boeing developed the jet with Sweden-based Saab, beating out competitors from Lockheed, which partnered with Korean Aerospace Industries, and Italy-based Leonardo. "We expect T-X to be a franchise program for much of this century".

The Boeing-Saab consortium was known to have pitched their jet's strengths as well as aggressive price cut.

St. Louis, Missouri, has been awarded.



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