Air Force awards $9 billion contract to Boeing for new training jets

Boeing received a contract worth up to $9.2 billion to build new training jets for the U.S. Air Force, the company announced Thursday.

Instead, Boeing will receive a $9.2 billion contract to produce 351 T-X trainer jets, plus simulators and other equipment.

"Today's announcement is the culmination of years of unwavering focus by the Boeing and Saab team", Leanne Caret, president and CEO of Boeing Defense, Space & Security, said in a statement.

The initial operating capability for T-X is planned for 2024, with full operational capability by 2034.

But in the past month Boeing has won a string of major military contracts that should pad its coffers for decades.

A T-38 Talon takes off at at Beale Air Force Base, California, August 21, 2018. Boeing bid very aggressively, considering that the Air Force's cap for the tender was $16.3 billion.

Boeing management offered a clean-sheet design, went all-in and was so confident of a win that it put a photo of the two T-X flying prototypes on the cover of the company's 2017 annual report, released earlier this year.

The Air Force says this structure helped it trim the total cost of the program down from the original estimate of $19.7 billion.

Boeing's victory puts the company in position to supply an initial USAF purchase of 351 jets and 46 simulators.

Boeing's joint bid with Swedish aerospace company Saab came in more than 50 percent below the Air Force's initial cost estimate, shutting out Lockheed and the U.S. subsidiary of Leonardo (formerly Finmeccanica). "Through competition we will save at least $10 billion on the T-X program".

Among the bidders for the T-X program, Northrop Grumman and BAE Systems decided not to submit a proposal for the US Air Force T-X Trainer program after carefully examining requirements and acquisition strategy as stated in the final request for proposals issued on Dec, 30, 2016.

The trainer aircraft was designed from scratch in partnership with Saab, drawing on technology from the Boeing F/A-18E/F Super Hornet and the Saab Gripen fighter. Lockheed Martin and Korea Aerospace Industries had teamed up to offer the T-50A, which has already been used to train pilots in Korea, Indonesia, Thailand, the Philippines and Iraq.

In a statement, Saab said the award means Boeing can now begin placing orders with its suppliers, including Saab, but has not done so yet.

  • Wendy Palmer