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Analysis Featured News Stocks

The Air Force Asked L3Harris: Can You Build Us a Fighter Plane for Less Than $50 Million?

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Quick. If I ask which American defense companies build fighter planes, what names come first to mind?

Lockheed Martin (NYSE: LMT), I’ll bet, maker of the F-16 Falcon, the F-22 Raptor, and the F-35 Lightning II. Boeing (NYSE: BA), too, probably, with its F-15 Strike Eagles and F/A-18 Hornets. You almost certainly do not think of L3Harris (NYSE: LHX), which is best known for producing radios, sensors, and (since acquiring Aerojet Rocketdyne) rocket engines.

And yet, it turns out that the Air Force’s newest fighter plane is built by — you guessed it — L3Harris.

(Re)introducing the A-1 Skyraider
The U.S. Special Operations Command (SOCOM) awarded L3Harris a $3 billion contract in 2022 to deliver 75 modified Air Tractor AT-802U Sky Warden turboprop aircraft. SOCOM plans to use these single-engine, fixed-wing, heavily armored fighter planes to provide “close air support, precision strike, armed intelligence, surveillance and reconnaissance (ISR), strike coordination and forward air controller” missions in uncontested air environments. Essentially, the planes were to take over the kinds of roles played by A-10 Warthog fighter jets in Afghanistan and Iraq.

Amazingly, the contracted price of the planes implies each of the new fighters will cost as little as $40 million, or less than half the cost of a Lockheed Martin F-35.

But what would these planes look like when finished? And what would they be called? The answers to these questions came just last week, when the U.S. Air Force announced it will rename its OA-1K to “armed overwatch” concept the “Skyraider II.”

An homage to the A-1 Skyraiders that performed close air support missions in Korea and Vietnam, the newly named Skyraider II is based on a civilian crop duster design, and is designed to operate out of unimproved airfields with short runways. USAF is still working out precisely what weapons it wants on the Skyraider II, with everything from 2.75-inch Advanced Precision Kill Weapon System rockets to Hellfire missiles to Joint Air-to-Surface Standoff Missiles and Harpoon anti-ship missiles under consideration, making the plane sound like a Swiss army knife of capabilities. However configured, the plane will be able to carry up to 6,000 pounds of ordnance — roughly equivalent to the internal load capacity of an F-35.

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