Aeronautics, a business unit of Lockheed Martin Corp. (NYSE:LMT), recently won a contract to make changes to F-35 fighter jets. The Naval Air Systems Command in Patuxent River, Maryland, gave the award.

How the Deal Will Work

The contract is worth $107 million, and it should be finished by December 2029. Under the terms of the deal, Lockheed will help the F-35 Joint Strike Fighter programme with engineering, testing, maintenance, logistics, and materials. This will help with Phase 2 upgrades to the Australia Canada United Kingdom Reprogramming Laboratory (ACURL).

This change also makes it possible to buy hardware for the verification and validation system, infrastructure hardware for the common system, ACURL Phase 2 follow-on modernization design, and training for ACURL Phase 2 efforts.

The majority of this contract’s work will be done in Elgin, FL.

What the F-35 Means for LMT

With its F-35 fleet, Lockheed Martin has a strong position in the global market for military aircraft. There are many things about stealth aircraft that make them a good choice for many countries. Also, LMT’s efforts to modernize and improve planes with new technologies to meet the needs of modern warfare have a big impact on demand.

In 2022, 66% of the Aeronautics business unit’s net sales came from the F-35 program, which was still the biggest source of income for that business unit.

Since the start of the F-35 programme, Lockheed Martin has delivered 894 planes, with 345 more on order until December 2022. This, along with the most recent contract win, makes it more likely that the Aeronautics business segment will make more money.

In 2023 and 2024, the company plans to send out between 147 and 153 jets, and in 2025 and after, it plans to send out 156 jets. This, in turn, should make a big difference in how much LMT makes in the military aircraft field.

Growth Expectations

Mordor Intelligence predicts that the global military aircraft market will grow by more than 4% per year between 2022 and 2031. These predictions show that the company has a lot of chances to make more money as the military aircraft market grows.

Northrop Grumman (NYSE:NOC), Airbus Group (OTCMKTS: EADSY), and Textron (NYSE:TXT) are also well-known defense companies that make military aircraft. They are also expected to benefit from the growth opportunities in the market mentioned above.

Northrop Grumman has been a leader in the development of manned aircraft since its beginning. Northrop Grumman has helped customers all over the world with everything from fighter jets and stealth bombers to surveillance and electronic warfare. It has made some of the most advanced planes in the world, like the B-2 Spirit stealth bomber and the E-2D Advanced Hawkeye, which changed the game.

Its Aeronautics Systems unit works on designing, making, integrating, maintaining, and updating advanced aircraft systems. Mission Systems, on the other hand, offers advanced mission solutions and multifunction systems like Airborne Early Warning & Control, LONGBOW Fire Control Radar, and Scalable Agile Beam Radar.

The military planes made by Airbus Group are the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport, and the Eurofighter, which is the most advanced multi-role fighter ever made.

Since more than 40 years ago, the company has also offered a wide range of services to its customers who fly planes. Its services include training for both flight and ground crews as well as live-fire drills anywhere in the world.

Textron’s military planes include the Beechcraft T-6, which is used for training, and the Beechcraft AT-6, which is a light attack plane. The company also makes the T-1A jet trainer, the T-44 and T-34 training planes, and the Beechcraft Model 18 light bomber.

Its subsidiary, Able Aerospace Services, helps commercial and military fixed-wing and rotor-wing aircraft with parts and maintenance, repair, and overhaul services.

Lockheed stock has gone up 7.4% in the past year, while the industry as a whole has gone down 12.3%.

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