Boeing Wins $20 Billion Contract for US Navy's Next-Generation Fighter

The Pentagon has awarded Boeing a $20 billion contract to develop and build the US Navy's next-generation fighter aircraft, officials announced on Tuesday. The award ends months of delays in a programme viewed as central to American efforts to counter China in the Pacific.

It marks Boeing's second major fighter-jet contract in as many years. In March last year, the company was chosen to build the US Air Force's new F-47 fighter, giving it two sixth-generation jet programmes in consecutive years.

How the competition narrowed

Lockheed Martin was dropped from the running in March last year after Navy officials concluded its design fell short of the required criteria, leaving Boeing and Northrop Grumman as the final contenders. Boeing prevailed for the development contract to produce the test aircraft.

The programme could eventually be worth hundreds of billions of dollars as production scales up and international buyers potentially place orders.

Boeing was seen as a strong candidate throughout because of its long record of building carrier-based fighters for the Navy, including the F/A-18E/F Super Hornet, the aircraft the new jet is meant to replace. That experience also helped ease defence officials' concerns over whether the company had enough engineers and suppliers to handle the F-47 and the Navy programme simultaneously.

Investors reacted to the decision, with Boeing shares trading 2.25 per cent higher on Tuesday while Northrop Grumman shares fell 3.5 per cent.

Boost for St. Louis operations

The contract provides a significant lift for Boeing's fighter production facilities in St. Louis, Missouri, where the F/A-18E/F Super Hornet and EA-18G Growler lines are being shut down.

Steve Parker, president and chief executive officer of Boeing Defense, Space & Security, said the company has invested in new facilities suited to building multiple products with next-generation capabilities, adding that its team is ready to execute the programme.

The aircraft, currently known as the F/A-XX programme, will serve as the central fighter platform within the Navy's Next Generation Air Dominance (NGAD) family of systems.

Michael Duffy, the Pentagon's chief weapons buyer, described the fighter as a crucial and non-negotiable investment in America's national security and long-term air combat capabilities.