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With international sales of its new F-35 fighter jet coming, Lockheed (NYSE: LMT) is maneuvering Boeing Co. (NYSE: BA) and Saab AB out of the hostile skies.
The program manager of this particular jet believes that there will be fewer prime manufacturers in the future. This won't impact lower-level suppliers substantially, though, as they will have an ample role with the F-35 and continue to service existing aircraft from other manufacturers. These suppliers contributed more than 70% of the work to the F-35.
By 2020, according to a report by Bloomberg, there could be only one fighter plane in the western world. According to an analyst from the Teal Group, which is an aviation consultancy, this is by design, following the F-16's plan.
In addition to the possibility of expedited sales in the United States, talks are beginning with several nations not included in the original deal -- including Finland, Spain, South Korea and Japan.
If all goes as planned, Lockheed's 31% share of the global fighter jet market, which has persisted for more than 20 years, would spike to 50%. Currently, Boeing owns 24% of this $17 billion market, but it's clearly a stake that's in jeopardy.
Boeing is banking on its F/A-18 Super Hornet for the future, and Saab is leaning on the Gripen, which unfortunately has only a limited domestic market.
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