DUBAI, UAE—Boeing officials are gushing over the U.S. Air Force’s interest in a combat version of its T-7A training jet, an endeavor that could help the company’s lowball-bid strategy pay off.
Last week, an Air Force official said at the International Fighter Conference in Madrid that a proposed light attack variant of the T-7 might replace aging F-16s—and that wasn’t the first time service officials had talked about it, said Boeing’s Donn Yates.
The Boeing-Saab T-7A Red Hawk, built to replace the Air Force’s half-century-old T-38 trainers and train new pilots for fifth-generation fighters like the F-35, is years late and has been plagued with problems, notably in the emergency escape system. The Air Force accepted the first five T-7s in September.
To date, Boeing has reported $1.3 billion in losses on the tardy training jet. The company underbid in the original competition; delays and charges have added additional pressures. The T-7 is just one of several programs that Boeing won with a strategy of lowball bids intended to lose money in early production lots but profit on later lots and decades of support contracts.
Yates said the company was “very aggressive” in bidding for the trainer program because “they knew that this was going to happen. So that was part of the strategy early on. It’s been a little bit painful because there were some things that happened along the way, but we think we can move past it.”
Boeing and the Air Force have both cited progress on the ejection seat but there is still work to do, Yates said.
Other delays are due to faulty flight control software, which is still being refined, but Yates said they have completed “a lot of the burndown on the risk” of that problem.
Next year, the company will unveil a “new” and “deliberate” plan for the future of the T-7, Yates said.
The trainer has “considerable sales potential” beyond the Air Force, as it’s a contender to replace the U.S. Navy’s T-45 jet trainers and other emerging programs to buy a tactical and adversary trainer, said Ray Jaworowski, an analyst with Forecast International.
The Pentagon has launched a few efforts, such as the Air Force’s Advanced Tactical Trainer, or ATT, and the Navy’s Tactical Surrogate Aircraft, or TSA, to develop new training aircraft.
Because the T-7A is unclassified, if the Pentagon wanted a “surrogate” trainer, which could be used as a companion trainer and an adversary, Boeing would need to make alterations if the customer wanted to emulate actual combat systems, Yates said. Boeing is using independent research-and-development funds to start developing a classified trainer, he said.
Boeing has a $9.2 billion contract with the Air Force to deliver 351 T-7s, as well as 46 simulators and ground equipment. The Air Force’s first T-7 landed at Edwards Air Force Base in California for flight testing last week.
Correction: An earlier version of this report quoted an analyst as saying the T-7 has “considerable sales”; in fact, he said “considerable sales potential.”
