Trump awards Boeing much-needed win with fighter jet contract

Washington: US President Donald Trump on Friday awarded Boeing the contract to build the US Air Force's most sophisticated fighter jet, handing the company a much-needed win.

The Next Generation Air Dominance program will replace Lockheed Martin's F-22 Raptor with a crewed aircraft built to enter combat alongside drones. The plane's design remains a closely held secret, but would likely include stealth, advanced sensors, and cutting-edge engines.

Shares of Boeing were up 5 per cent after the news. The Seattle-based company beat out Lockheed Martin for the deal. Lockheed's shares fell nearly 6 per cent. Reuters reported Boeing's victory before the official announcement.

Trump, the 47th US president, announced the winner from the White House, saying the new jet will be called the F-47.

For Boeing, the win marks a reversal of fortune for a company that has struggled on both the commercial and defense sides of its business. It is a major boost for its St. Louis, Missouri, fighter jet production business.

The engineering and manufacturing development contract is worth more than $20 billion. The winner will eventually receive hundreds of billions of dollars in orders over the contract's multi-decade lifetime.

NGAD was conceived as a "family of systems" centered around a sixth-generation fighter to counter adversaries such as China and Russia.

Boeing's commercial operations have struggled as it attempts to get its best-selling 737 MAX jet production back up to full speed, while its defense operation has been weighed down by underperforming contracts for mid-air refueling tankers, drones and training jets.

Cost overruns at the KC-46 mid-air refueling tanker program have surpassed $7 billion in recent years, while another fixed-price contract to upgrade two Air Force One planes has created a $2-billion loss for the top 5 US defense contractor.

Lockheed, which was recently eliminated from the competition to build the Navy's next-generation carrier-based stealth fighter, faces an uncertain future in the high-end fighter market after the loss.

Billionaire and presidential adviser Elon Musk has voiced skepticism about the effectiveness of crewed high-end fighters, saying cheaper drones were a better option.

While Lockheed could still protest the award to Boeing, the fact Trump announced the deal in a high-profile Oval Office press conference could reduce the possibility of a public airing of arguments against the agreement from the Bethesda, Maryland-based defense firm.