Boeing-Saab Team Lands Air Force T-X Contract

Boeing [BA] and Saab have won the Air Force's T-X next-generation trainer competition over two competing teams, and will build over 350 new aircraft for the service to train pilots flying fourth- and fifth-generation jet aircraft, the service said on Thursday.

The Air Force plans to purchase 351 aircraft, 46 simulators and associated ground equipment in a contract currently worth up to $9.2 billion, according to a contract release. The aircraft will replace the service's 57-year-old fleet of T-38C Talon aircraft. The indefinite delivery/indefinite quantity contract allows the Air Force to procure up to 475 aircraft and 120 simulators, according to the contract announcement. That format is designed to provide the best value to the taxpayers for current needs and in the future "should requirements change," the statement said.

Two Boeing-Saab T-X aircraft fly over St. Louis (Boeing photo)ces_STL_4/27/2017_RMS#307321_MSF17-0022 Series_Photos by John Parker

Two Boeing-Saab T-X aircraft fly over St. Louis (Boeing photo)ces_STL_4/27/2017_RMS#307321_MSF17-0022 Series_Photos by John Parker

Air Force Secretary Heather Wilson said in the statement that the competition saved the service at least $10 billion on the program. The original cost estimate was $19.7 billion for 351 aircraft.

Three teams competed for the lucrative contract. Boeing teamed up with Sweden-based Saab to present a clean-sheet design. The company has built two aircraft at its facility in St. Louis, Missouri, to date.

“Today’s announcement is the culmination of years of unwavering focus by the Boeing and Saab team,” said Leanne Caret, president and CEO, Boeing Defense, Space & Security. “It is a direct result of our joint investment in developing a system centered on the unique requirements of the U.S. Air Force. We expect T-X to be a franchise program for much of this century.”

Lockheed Martin [LMT] partnered with Korea Aerospace Industries to offer a specialized version of the latter’s T-50 jet aircraft, dubbed T-50A for the Air Force competition. It would have been built at Lockheed Martin's facility Greenville, South Carolina. Leonardo DRS, the U.S. subsidiary of Italy's Leonardo aerospace firm, offered its T-100 jet trainer and planned to build it in Tuskegee, Alabama. The aircraft is a block upgrade from the Alenia-Aermacchi-developed M-346 aircraft, which trains fourth- and fifth-generation pilots in Israel, Italy, Singapore and Poland.

Lockheed Martin said in an emailed statement Thursday evening that it was "disappointed to learn that the U.S. Air Force did not select our offering. We believe we presented a very strong solution and await the customer’s debrief to hear more details regarding the decision."

Leonardo DRS said it cannot comment until it has been debriefed by the Pentagon.

An initial delivery order for $813 million will provide for the engineering and manufacturing development of the first five T-X aircraft and seven simulators, the release said. The first T-X aircraft and simulators are expected to be delivered to Joint Base San Antonio-Randolph, Texas, in 2023. All undergraduate pilot training bases will eventually transition from the T-38 to the T-X, to include Columbus Air Force Base, Mississippi; Laughlin Air Force Base, Texas; Sheppard Air Force Base, Texas; and Vance Air Force Base, Oklahoma. The Air Force is planning for T-X to reach initial operating capability by 2024 and full operational capability by 2034.

The T-38 first entered service in 1961. T-X will help train Air Force pilots to fly fourth- and fifth-generation jets including Boeing’s F/A-18 Super Hornet and Lockheed Martin’s F-35 Joint Strike Fighter.

Analysts at the Capital Alpha Group recently noted that although Boeing had the most probable chance of winning the contract, it still suffered risks based on prior program performance, including major schedule slippages during the KC-46 next-generation refueler program.

Boeing also submitted the sole clean-sheet design after Northrop Grumman [NOC] withdrew from the competition in 2017, and would bear the cost of any performance slips.

Boeing would build its T-X at its St. Louis facility, which may require the contract award to be sustained as F/A-18 and F-15 fighter aircraft production begins to dwindle in the mid-2020s, Capital Alpha Group noted. Winning the Navy’s MQ-25 next-generation unmanned aerial tanker competition in August will help to keep the production lines open, but it may not be enough if Boeing does not win the T-X competition.

The contract opens up the winner to a wide global training market. Any country that operates an advanced jet trainer, such as the German or Turkish air forces, could also be interested in acquiring T-X aircraft, analysts have said.

The world trainer market is valued at about $3 billion per year, and the T-X program is “easily the most important competition” in the high-end jet market, according to a 2016 report by the Teal Group, an aerospace and defense market analysis firm.

Similarly, if the Air Force does succeed in boosting its squadron levels from 312 to 386 by 2030 — as service leadership advocated for at the recent Air Force Association Air, Space and Cyber Conference — it would require additional pilot training that could potentially boost demand for T-X, analysts said.

The Air Force on Monday awarded a Boeing and Leonardo team a contract worth $375 million to build the first four UH-1N Huey replacement helicopters. (Defense Daily, Sept. 24) The total contract is estimated to be worth nearly $2.4 billion for a total of 84 new aircraft, according to the contract announcement. Sierra Nevada Corp. [SNC] and Lockheed Martin’s Sikorsky subsidiary had also submitted bids for the competition.





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