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Boeing targets global sales of T-X training jet after U.S. contract win: executive

Published 02/25/2019, 10:27 PM
Updated 02/25/2019, 10:30 PM
© Reuters. FILE PHOTO: The Boeing logo is pictured at the LABACE fair in Sao Paulo

By Jamie Freed

AVALON, Australia (Reuters) - Boeing (NYSE:BA) Co is in talks with potential customers globally, including the Royal Australian Air Force, about ordering the new T-X training jet selected by the U.S. Air Force for a $9.2 billion contract in September, an executive said on Tuesday.

"We really do see a fit and need for this across fleets all over the world," Thom Breckenridge, Boeing Vice President of International Sales, Strike Surveillance & Mobility, told reporters at the Australian International Airshow. "We have been in discussions with several customers about the T-X globally."

Australia, a major Boeing customer, is among the potential buyers of the T-X as it looks to replace its 33 BAE Systems (LON:BAES) PLC Hawk trainers within the next 10 to 15 years, Breckenridge said, declining to name other countries that were interested.

He said Australia had not yet issued a request for proposal but initial discussions about the T-X had been held with the Royal Australian Air Force (RAAF).

"We are very eager to understand RAAF's needs and talk to them about why we see the benefits of T-X," Breckenridge said.

RAAF did not respond immediately to a request for comment. Alongside its 2016 Defence White Paper, Australia listed a future project called the "lead-in fighter training system" with a program time frame of 2022-2033 and an investment value of A$4 billion ($2.86 billion) to A$5 billion.

Boeing, in partnership with Sweden's Saab AB, in September beat out Lockheed Martin Corp (NYSE:LMT) and Italy's Leonardo SpA for the U.S. Air Force contract, which includes an initial 351 jets and 46 simulators.

The low price of the Boeing fixed-price contract surprised analysts, but CEO Dennis Muilenburg in October said on an earnings call that the T-X was expected to be a program with production and services opportunities for much of this century. It could be modified to be a light attack fighter in the future, he said.

Breckenridge said the development of a clean-sheet design with easy access for maintenance had allowed for a "new and disruptive" offering at an attractive price point.

The U.S. Air Force expects the first T-X jets to have initial operational capability by 2024 with the program to reach full operational capability in 2034, replacing an aging fleet of T-38 planes which are nearly 50 years old.

© Reuters. FILE PHOTO: The Boeing logo is pictured at the LABACE fair in Sao Paulo

($1 = 1.3974 Australian dollars)

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