How Northrop Grumman, Lockheed Martin, and Boeing All Lost a $30 Billion Air Force Contract

Group 1 - The U.S. Air Force has selected General Atomics and Anduril for its Collaborative Combat Aircraft (CCA) program, bypassing major defense contractors Boeing, Lockheed Martin, and Northrop Grumman, resulting in a potential loss of at least $30 billion in revenue for these companies [1][2] - The CCA program aims to equip 300 F-35 stealth fighter jets and 200 Next Generation Air Dominance fighters with two drones each, totaling 1,000 drones, with an estimated production cost of $30 million per drone, potentially making the program worth $30 billion initially [3][4] - The CCA program could expand significantly, potentially growing to a value of $180 billion if the Air Force pairs its F-35s with two drones each, reflecting a substantial opportunity for the selected contractors [3][4] Group 2 - The decision is particularly detrimental for Boeing, Lockheed, and Northrop, as the potential $180 billion contract value is comparable to their combined annual revenues, although the revenue loss will be spread over six years [4] - Despite the setback, the companies not selected will remain part of a broader vendor pool, allowing them to compete for future contracts and potentially serve as subcontractors for the winning companies [4] - The current momentum favors General Atomics and Anduril, positioning them advantageously for future opportunities, and investors may look forward to an Anduril IPO as a way to capitalize on the CCA program [5]