If you thought unmanned drones had effectively marked the end of traditional fighter jets, think again.
On Monday, Textron (NYSE:TXT) raised eyebrows by unveiling its very own new fighter jet: the Scorpion ISR/Strike aircraft platform.
According to Textron's press release, the Scorpion is a joint effort between the Rhode Island-based company and AirLand Enterprises. The team-up began in January 2012, and a demo version of the plane is already in its test phase. Meanwhile, the first flight is scheduled to occur before the end of the year.
Their ultimate goal? Textron CEO Scott Donnelly says they began development of the Scorpion "with the objective to design, build, and fly the world's most affordable tactical jet aircraft capable of performing lower-threat battlefield and homeland security missions."
It's also worth noting they did it in a ridiculously short period of time, and all without up-front government funding.
But this also begs the question: Why in the world would any company would ever want to build another manned fighter jet, especially with thousands of unmanned drones now patrolling skies all around the world?
Here's Why They Made It Happen
But before you go rolling your eyes and thinking the Scorpion is doomed to failure, remember Donnely joined Textron from General Electric Aviation in July, 2008, where he served as president and CEO -- so the man knows a thing or two about what makes the aviation industry tick.
In addition, remember Textron's AAI subsidiary specializes in building unmanned systems, most notably including the Shadow UAV. Though the Shadow is primarily used for reconnaissance, as of last August it had racked up an incredible 750,000 total flight hours supporting combat operations in Afghanistan alone, with more than 173,000 missions taking place over Iraq and Afghanistan since it was introduced. Textron, then, knows all too well how the unmanned aircraft revolution is affecting the broader market.
What's more, Textron also wasn't exactly starting from scratch with its jet-plane aspirations: The company already owns Cessna and jet engine-maker Lycoming, created the massively successful Osprey V-22 tilt-rotor aircraft with Boeing (NYSE:BA), and runs Bell Helicopter, through which it builds the ridiculously powerful AH-1Z Viper attack helicopter.
But for all their experience, why did they set about creating an inexpensive manned fighter jet?
In short, despite what the rise of unmanned aircraft systems might seem to indicate, there still exists an enormous target market for traditional manned planes.
Specifically, as DefenseNews points out, former U.S. Air Force Secretary Whit Peters is serving as both an investor in and advisor to AirLand Enterprises, and believes the plane could quickly find a home in at least one of several key programs.
But first, note that in addition to the Scorpion's lower initial procurement price, the plane also boasts operation costs of just $3,000 per hour.
If that sounds high, consider the fact Lockheed Martin's (NYSE:LMT) F-16 costs just under $22,000 per hour to run. Even worse, recent Air Force estimates for Lockheed's highly capable F-35A Joint Strike Fighter put its operating costs between $24,000 and $32,000 per hour.
Donnelly is aware the F-35 is on an entirely different performance plane than his new Scorpion, but he also notes:
We're offering a solution to people who have budgetary challenges and still have mission requirements. This is not a competitor to the F-35. The vast majority of missions don't need that.
Domestically, then, it's no surprise the Scorpion team is eyeing a coveted spot in the Air Force's T-X Trainer program, which aims to replace its aging fleet of T-38 Talons made by Northrup Grumman.
For those of you keeping track, however, competition for the T-X Trainer contract is steep with other contenders including the Hawk T2/128 from BAE Systems, the recently announced JAS 39 Gripen from Boeing and Saab, and a U.S. version of Alenia Aermacchi's T-100 trainer from Italy's Finmeccania and General Dynamics (NYSE:GD). Then again, while Textron may be entering a crowded field here, you can bet BAE, Boeing, and GD certainly can't be too happy about the Scorpion's debut, either.
What's more, Peters stated the Scorpion could win additional business when the worldwide fleet of Vietnam-era Cessa A-37s eventually need replacement. In addition, sequestration is threatening to put the A-10 and F-15C programs on the cutting block, representing another opportunity for Scorpion to find a home.
Finally, given the ever-changing intricacies of international export requirements, the Scorpion also apparently serves as a great baseline model that can be exported to U.S. partner countries, then modified at the end-location to suit customers' needs.
In the end, then, while it's an admittedly risky move to undertake such a monumental task without any pre-existing requirement or contract in place, there's definitely a market out there for Textron's new jet.
Now, assuming the test flights go as planned, all Textron has to do is secure some business.
Fool contributor Steve Symington owns shares of Textron. The Motley Fool owns shares of General Electric Company, Lockheed Martin, Northrop Grumman, and Textron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.