How Great Britain's New Massive Aircraft Carrier Could Make Billions for One American Company

For decades -- centuries -- "Brittania ruled the waves." But today, the Royal Navy is on the cusp of irrelevance.

Next year, its last operational aircraft carrier, the HMS Illustrious, is set to retire. (Its air wing has already departed). When that happens, the mighty British navy will be... aircraft carrier-less.

Once upon a time, Britain had a navy. Its carrier fleet, c. 1945. Source: Wikimedia Commons

The queen is dead. Long live the queen!
And yet, Illustrious' retirement sets the stage for a new age in aircraft carriers for the Royal Navy. That same year, Britain aims to launch the lead vessel of a new class of carriers, the HMS Queen Elizabeth.

The new Queen will be a technological marvel, equipped with a new "highly mechanized weapon handling system" that can be operated, in a pinch, by as few as a dozen sailors. The entire vessel, twice the size of the carrier it is replacing, will boast a crew of only 679 souls -- just two dozen more than manned the Illustrious.

When built, the HMS Queen Elizabeth will become the fourth-largest carrier class on the planet. Source: Wikimedia Commons

On combat operations, the Queen Elizabeth will carry as many as 40 aircraft. The ship's crowning glory will be its complement of as many as 36 of Lockheed Martin's (NYSE: LMT  ) new F-35B Lightning II fighter jets. A mix of Boeing (NYSE: BA  ) Chinook and AgustaWestland Merlin helicopters will likely accompany them, along with, potentially, tiltrotor Ospreys built by Boeing and Textron (NYSE: TXT  ) .

But it's the F-35s that are key for Lockheed Martin. You see, the Queen Elizabeth remains several years from actual service. Even if it launches next year, sea trials aren't scheduled to begin before 2017, flight trials in 2018, and actual entry into service until 2020. But already, the United Kingdom is gearing up to make some pretty big buys of Lockheed Martin's uber-fighter to outfit its new flagship.

Bogeys on the horizon
So far, the U.K. has taken delivery of three F-35s from Lockheed. Last month, the U.K. Ministry of Defence ordered its fourth bird. The MoD is now in talks to purchase a flight of 14 more F-35s -- en route to fulfilling its commitment to buy a total of 48, minimum.

And that's only the start. When Britain signed up to help develop the new stealth fighter as part of a multinational "coalition of the paying," the MoD said it wanted up to 138 F-35s. These planes would then be split between the Royal Air Force and the Royal Navy. But in particular, Britain designed the Queen Elizabeth "from the ground-up" as a vehicle for delivering F-35s to their targets. So once the carrier is commissioned into service, it will account for a big chunk of the nation's F-35 force.

What's more, the U.K. is still considering whether to build a second carrier of the QE class -- the anticipated HMS Prince of Wales. If this gets built, Britain will have to exceed its current commitment to buy 48 F-35s. Indeed, with the aerial detachments on these two vessels accounting more than half of Britain's original planned purchase, the UK could wind up buying more planes than it originally anticipated -- rather than cutting its original order short.

Foolish takeaway
At a per-plane cost exceeding $100 million, Lockheed Martin's F-35 stealth fighter is a plane that could bust many defense budgets. But the more countries that place orders for it -- and the more planes each country adds to its order -- the lower the plane's per-unit cost declines, encouraging still more orders from new buyers.

Right now, worst-case, Britain's commitments for F-35 purchases should add $4.8 billion to Lockheed's revenue stream. Once the Queen Elizabeth comes on line, that number could grow, and if the Prince of Wales follows the Queen to sea, it will mean even more money for Lockheed. Potentially, $13.8 billion -- or more.

HMS Queen Elizabeth -- charting a more profitable future for Lockheed. Source: UK Ministry of Defence

Oh, and one more thing
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Read/Post Comments (15) | Recommend This Article (8)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 14, 2013, at 11:28 AM, stockwatcher0153 wrote:

    Nice, Motley Fool, advice on how to "get rich" (3.9% is a nice dividend but hardly mega-bucks unless you start rich and compound all the interest for decades) by supporting the military-industrial complex (I know, I know, it doesn't really exist).

  • Report this Comment On December 14, 2013, at 1:20 PM, cdkeli wrote:

    It's been well proven via game theory and computer simulation that huge carriers are a losing strategy. The facts have shown that employing many smaller, highly maneuverable, tactically superior, far cheaper craft is the best strategy.

  • Report this Comment On December 14, 2013, at 1:30 PM, TMFDitty wrote:

    "Put all your eggs in one basket and then watch that basket." -- Mark Twain

  • Report this Comment On December 14, 2013, at 1:51 PM, NotAFoolMonkey wrote:

    Using any wiki as source data discredits immediately any article in which it is used.

    Not sure where you acquired what passes as your education but they should demand the return of any degree or certification you received from them as well as inclusion of a disclaimer distancing that institution from your obvious lack of journalistic ability not to mention a complete lack of research capability.

    As for cdkeli, your game theorist and computer simulations models, like the BCS model, are flawed.

    Your game theories do not accurately reflect the intangibles (again like the BCS) associated with having a carrier task force floating over the horizon from a potential conflict zone nor its ability to bring aid to areas in need.

    Intangibles are not something that has ever been well measured by computers or mathematicians using game theory. Frankly because intangibles do not fit within their narrow mathematical definition of real world events, its why events through out the world continue to surprise them while those actually paying attention (and usually ignored) to those events more often than not get it right.

  • Report this Comment On December 14, 2013, at 2:59 PM, quacker wrote:

    and how much are we giving russia for their helo's

  • Report this Comment On December 14, 2013, at 4:15 PM, Howie47 wrote:

    I guess a road pot marked with wars is our immediate future? I'm sure plenty of those people getting wealthy off of their weapons systems sells. Are the same people in a position to make sure their products are used! After all. Creating a market for your product is just good ol business sense. How do you vote Senator? "You did say Carriers and F35's would be involved, right?" Then I vote attack those no good satan worshipping low lifes!

  • Report this Comment On December 14, 2013, at 5:06 PM, gmjennings wrote:

    I'm a plank owner on the USS Nimitz CVAN68

    (she started her career as an attack carrier) at

    that time '75 her cost was 3 billion now the new BRITS will be 13.8 Billion. And the Nimitz class is still the worlds largest and best of the seas!!!!!

  • Report this Comment On December 14, 2013, at 7:17 PM, fingerlakes54 wrote:

    new planes and ships will be the pride of The New World Order for sure. Unfortunately ordinary taxpayers will never get to use these expensive items. The NWO will keep order in the world--or else. LOL

  • Report this Comment On December 14, 2013, at 10:32 PM, FreddieMi wrote:

    "It's been well proven via game theory and computer simulation that huge carriers are a losing strategy."

    As someone with a PhD in philosophy let me assure you that is absolutely incorrect. Game theory was not designed to, and does not accept, multiple desired outcomes among participants along the same timeline.


    A nation may build an aircraft carrier as a symbol of intent to influence world invents. In such a case a competing nation sinking said aircraft carrier would not yield the desired result. To wit, negating the aforementioned intent--as intent proceeded action (the building of the carrier).

    A nation may build a carrier as a symbol of its economic and industrial capacity. A competing nation sinking said carrier in this scenario would likely have a negative outcome. Think blowing up the Statue of Liberty in the hopes of lowering US morale. More likely than not opposition will stiffen and so it is better to not blow up the Statue of Liberty unless you wish a much larger confrontation.

  • Report this Comment On December 14, 2013, at 11:11 PM, badkat7 wrote:

    The problem is simple. The HMS Queen Elizabeth will start active life with NO aircraft. The F-35B is an unmitigated disaster. Not only were major sacrifices made in range and payload to accommodate the VTOL capability, the F-35B is rated as "occasional VTOL due to excessive wear on the components". In other words the F-35B is significantly LESS competent in the intended role than the ORIGINAL Harrier (never mind the idiot version made for the US Marines called the AV-8B that flies almost 100 knots slower). The F-35B carries just 2 inboard air-to-air missiles which means it is incompetent for air superiority. It's payload is massively reduced so it is only marginally competent as a weapons delivery platform AND it lacks the manouverability of the Harrier. Basically it is an over-priced ostrich of a flying machine. And the British, because they are fundamentally stupid, bought it.

  • Report this Comment On December 14, 2013, at 11:18 PM, badkat7 wrote:

    As for carrier relevance. The modern day carrier allows a force to put significant air power anywhere in the world. As such it is probably the most powerful, useable, extension of military presence short of a full, armored, invasion force. Put more simply, if Britain had not had Carriers and Harriers, the Falklands would've been lost to the Argentinian thugs simply because Britain could not have asserted air superiority or given ANY protection to its naval convoy. Britain has already surrendered its last Vulcan - during the Falklands war the lone Vulcan attack on the air base in the Falklands was enough to cause the Argentinians to withdraw their air power to the mainland (almost an hour's flying time away). In effect they surrendered any chance of seriously challenging the Brits for air superiority. Today that situation is massively reversed - if the Argentinians launched a sneak attack and took out the Tornado Eurofighter squadron stationed on the islands, the war would be OVER. Because America has spectacularly failed to deliver the F-35B and the Brits have no backup plan. Heads should role in Britain for their stupidity and in Lockheed for their abject failure to deliver.

  • Report this Comment On December 14, 2013, at 11:24 PM, badkat7 wrote:

    @cdkeli. You are embarrassing yourself with your stupidity and ignorance so please, just shut up. Carriers are vulnerable in a full scale conflict but we haven't seen one of those since WWII. The practical reality is that Carriers today are indispensable extensions of military, and political, power around the world. Why else do you think the Chinese are building one? As a show of force?

    Your knowledge of battle tactics in the modern world is zero. Leave it to professionals who knew what they were doing long before you were born.

  • Report this Comment On December 15, 2013, at 10:58 AM, SeniorMoment wrote:

    Pretty stupid article as we are building 2 carriers not one

  • Report this Comment On December 18, 2013, at 5:58 AM, SirSausage wrote:

    In reality the British content in the new F-35 is quite extensive, over 20% in fact.

    BAE Systems provides aft fuselage and empennage, Horizontal and vertical tails, Crew life support and escape systems, Electronic Warfare systems,Fuel system, Helmet-mounted display and Flight Control Software.

    Moreover, Rolls-Royce also developed the lift fan system for the F-35B. this being a major component of the B variant. People don't realise what an important player Britain is in the aerospace industry, it is quite comfortably the world's 2nd largest aerospace manufacturer.

    I would also point out that the 2nd carrier(Prince of Wales) is in an advanced state of construction, a 30 min google session could have found out these details with a minimum of fuss.

  • Report this Comment On March 13, 2014, at 11:06 AM, mranderson2 wrote:

    There are a lot of badly advised comments on here. To address a few:

    - gmjennings. The QE carriers themselves are costing approx 4.5bn USD each. Thats about the price of the first Nimitz carrier 40 years ago (later ones were more), so thats not a bad price dont you think? And a lot less than the 13bn for the latest US Ford carrier, and massively cheaper to maintain.

    - badkat7. The F35 is highly superior to the Harrier, which was great in the 1960's. The F35 is very expensive, but as many nations are planning to buy the price will decrease. Seeing as the British have a 20% stake in the F35 sales, they are not entirely unhappy.

    - badkat7. There is no such thing as a Tornado Eurofighter. There's a squadron of Typhoons based on the Falklands, I presume you mean them. The chances of a "sneak" attack by Argentina would seem remote not only because of all the monitoring and surveillance in place, but also due to the destroyers, missile systems, troops, and Joint Rapid Reaction Force on permanent readiness. Oh I forgot to mention the nuclear sub. And the fact that Argentina has no real military attack capability.

    - badkat7. Your head should "role", or roll even. When it comes to being fundamentally stupid, I think you have that title sewn up.

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