Lockheed Changes Course on New Air Force Training Jet

For the past several months, Lockheed Martin Corp. (NYSE: LMT) and its partner, Korean Aerospace Inc. (KAI), have been considering a clean-sheet design for a new U.S. Air Force training jet. The T-X, as it’s mysteriously called, would replace the decades old T-33 trainer, and may be the last large Air Force contract available for some time.

A team composed of Boeing Co. (NYSE: BA) and Saab are preparing two clean-sheet designs for the new training jet, and another clean-sheet design is reportedly being worked on by Northrop Grumman Corp. (NYSE: NOC) and partners BAE Systems and L-3 Communications Holdings Inc. (NYSE: LLL). A fourth competitor, Raytheon Co. (NYSE: RTN), was last said to be considering a partnership with Italy’s Alenia Aermacchi, a subsidiary of Finmeccanica, which had terminated plans to partner with General Dynamics Corp. (NYSE: GD) to bid on the new trainer.

A Lockheed executive said Thursday that its bid would offer a modernized version of KAI’s T-50. According to a report at Defense News, Lockheed EVP Rob Weiss said a clean-sheet design would be eight times more expensive than an upgraded T-50A. Weiss added:

At the end of the day, it costs more, takes longer, is higher risk and does not add any capability beyond what our modernized T-50 will do.

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The Air Force is expected to publish a request for proposals later this year and award a contract in 2017 with an initial operational capability deadline of 2024. The contract is expected to require about 350 of the new trainers to replace the existing T-38 fleet.

Just last month Boeing won a contract worth $855 million to maintain and support the T-38 fleet through 2026. The company will provide services for 456 planes, including working on avionics, cockpit displays, control panels, communications systems and upgrading 37 aircrew training devices.