Military
Raytheon to Join Bidding for Air Force Training Jet Contract
Published:
Last Updated:
Ever since General Dynamics Corp. (NYSE: GD) decided last March to drop its partnership with Italy’s Alenia Aermacchi to bid on the U.S. Air Force’s T-X training jet, the Italian company has been looking for a new partner. It appears that Raytheon Co. (NYSE: RTN) has stepped up.
A report in Defense News cites a source who said that Raytheon will announce on Monday, February 22, that it is joining Alenia in a bid for the training jet program. The first phase of the program is valued at about $8.4 billion. The Air Force is expected announce a contract award in 2017 to acquire 350 of the new planes to replace the decades-old T-38 fleet.
The Raytheon/Alenia bid is based on Alenia’s M-346 training jet, which the company has rebranded as the T-100. The Italian company needs a U.S.-based prime contractor, and Raytheon, which provides electronics and weapons to other manufacturers, needs a platform for its components.
Boeing Co. (NYSE: BA) and Saab have teamed on a clean-sheet design for the T-X. Other expected bidders on the Air Force trainer contract are a clean-sheet design from a team lead by Northrop Grumman Corp. (NYSE: NOC) and a proposal from Lockheed Martin Corp. (NYSE: LMT) in conjunction with Korean Aerospace, makers of the T-50 jet trainer, which would be modified to meet the Air Force’s requirements. Textron Airland may also be preparing a new design, but none has yet been announced.
The T-X contract may be the last big military aircraft contract for several years. The Pentagon recently chopped five of Lockheed Martin’s F-35 fighters from the 2017 defense budget in an effort to manage the Air Force’s major modernization programs. Funding for major Air Force acquisitions is forecast to rise by 73% between fiscal year 2015 and fiscal year 2023 driven by the F-35, the new Long Range Strike-Bomber and the KC-46 tanker.
Raytheon stock closed up 0.7% on Wednesday, at $121.68 in a 52-week range of $95.32 to $129.99.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.