Boeing beats Northrop for a Navy fighter development deal of more than $20 billion

The U.S. Navy on Tuesday chose Boeing to develop the F/A-XX, the next fighter for its aircraft carriers, beating Northrop Grumman. The Department of War, the Pentagon's current name, valued the development contract at more than $20 billion.

The contract covers full-scale development. Boeing will design the jet and build test aircraft, to be tested on the ground, in flight, and with its systems and weapons.

The department said deliveries to the fleet are to begin in the 2030s. The fighter is meant to fly with the F-35C, the carrier version of the F-35, and later to replace the Super Hornet and the Growler, the Navy jet that jams enemy radar. The Navy has said the design will use a version of an existing fighter engine, not a new one.

Neither the department's release nor Boeing's said whether the contract is cost-plus or fixed-price. On a cost-plus deal, the government pays the company's costs plus a fee. On a fixed-price deal, extra cost stays with Boeing.

That risk is already on Boeing's books. Its filings describe the VC-25B presidential aircraft as a fixed-price program of $4 billion, and in the second quarter of 2026 the company booked $280 million of losses on it, primarily for extra production and certification resources. The filings also describe the KC-46 tanker, the T-7 trainer and the MQ-25 carrier drone as fixed-price development programs.

The F-47 award does not answer the question for this jet. An Air Force official said in March 2025 that Boeing's development contract for that fighter, which flies from land bases rather than carriers, pays the company's costs plus a fee. Neither release described the F/A-XX that way.

This award is development money, not a production order. Boeing's defense backlog, orders not yet filled, was $85 billion at the end of June.

Reuters said production and foreign orders could take the program to hundreds of billions of dollars over its lifetime. That is a possibility, not the contract signed on Tuesday.

The choice was held up by an argument over whether industry could build two new fighters at once. In June 2025, Navy Secretary John Phelan told lawmakers the award was on hold because industry might not be able to build two sixth-generation fighters at the same time. Sixth-generation is the class that follows the F-35.

Congress later set aside $972 million in fiscal 2026 research-and-development funding for a development contract with one company. The Navy missed an August deadline it had set for the decision.

Steve Parker, president and chief executive of Boeing Defense, Space & Security, rejected Phelan's view at the Paris Air Show that June.

"Absolutely we can do it, and so can the industrial base, and so can the engine manufacturers. So I don't see that as being an issue."

He said Boeing was spending almost $5 billion on new facilities for air dominance in St. Louis and Mesa, Arizona, so the company could build both. Construction is still underway on the secure plant in St. Louis, which Boeing calls the largest in the United States. On Tuesday, Parker said:

"Delivering two advanced fighters in parallel was always our plan, and we invested accordingly. We are ready and able to build multiple concurrent future combat aircraft franchise programs."

Northrop Grumman was the only other company left in the contest. Lockheed Martin was already out. The award means Boeing will develop both U.S. sixth-generation fighters, this Navy jet and the Air Force F-47 it won last year.

Shares moved after the 4 p.m. Eastern close. Around 7:40 p.m. Eastern, Boeing shares were quoted 2.2% above that close and Northrop Grumman shares 2.7% below it. In AITA, the iShares fund that holds U.S. aerospace and defense companies, Boeing and Northrop Grumman were among the largest holdings as of September 25. The two names also appear in AXAR, the SPDR aerospace and defense fund, and in BPPA, the Invesco fund.

What the award does not settle is who pays if developing the F/A-XX costs more than planned.