Boeing Beats Lockheed Martin, and This F-47 Fighter Jet Contract Could Be Worth Hundreds of Billions

Core Viewpoint - Boeing has been awarded a $20 billion contract to develop the Next Generation Air Dominance (NGAD) fighter jet, named the F-47, marking its return to the fighter jet business after a long absence [4][6][12]. Group 1: Contract and Development Costs - The NGAD program is expected to cost at least $16 billion for development alone, with total costs for a unit of one NGAD and three drones estimated at approximately $1.7 billion [3]. - Boeing has already invested $2 billion in preparation for the F-47, and the total development costs could exceed $50 billion [9]. - The contract awarded to Boeing is of the "cost-plus" type, which guarantees profit on top of development expenses, contrasting with the Pentagon's recent preference for fixed-price contracts [10]. Group 2: Market Position and Financial Implications - Boeing has struggled in the defense sector, having not won any contracts for stealth fighters or bombers in the past, with its defense division losing money for the last three years [5][10]. - The F-47 contract could significantly improve Boeing's financial outlook, with analysts predicting a return to profitability and positive cash flow by 2026, potentially rising to $7 billion in annual profit by 2029 [13]. - The anticipated influx of cash from the F-47 program could accelerate Boeing's turnaround, which has been under pressure due to ongoing losses in its commercial airliner business [13]. Group 3: Future Outlook - The first F-47 jets could enter service as early as 2029, earlier than previously expected [12]. - The success of the F-47 program may influence Boeing's strategic decisions, including the potential retention of its Defense & Space business, which was previously considered for sale [14][15].