Long-range bombers such as the B-52, B-1, and B-2 are iconic Air Force symbols, and they provide the Air force with a capability that no other nation has -- the ability to rapidly deploy tailored effects anywhere in the world.They're also old. In fact, the B-52s have been flying since the 1960s, the B-1 since the 1980s, and the B-2s since the 1990s. Understandably, their technology is slightly outdated, and they're facing age-related issues.
That's why the Air Force has stepped up plans to acquire a next-generation stealth bomber. But Oct. 1 marks the beginning of the fiscal 2014 defense budget and, with it, the grim reality that sequestration is still in affect. In fact, thanks to budget cuts, for the first time in American aviation history, there are no new manned military aircraft in the development phase. That directly affects the Air Force's efforts to acquire a new bomber. It also affects Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT) and Northrop Grumman (NYSE:NOC). Here's what you need to know.
Stealth bombers vs. sequestration
The Air Force has been trying for years to acquire 100 Long-Range Strike-Bombers, or LRSBs, at a per-unit price of approximately $550 million. So far, however, it's been unable to lock-down a contract, in large part because of cost-related issues.
The inability to secure a new bomber isn't ideal in terms of overall national defense, but with conflicts mainly centered in Iraq and Afghanistan, the need for a stealth bomber hasn't been as pressing. But things are changing as new threats emerge in Asia. Just last week, for example, the Air Force deployed B-52s to Guam in an effort to "demonstrate the United States' continued commitment to stability and security in the Asia-Pacific region," according to the Air Force.
The increased need for a next-gen bomber is great news for Boeing, Lockheed, and Northrop, as all three have stated their intention to compete for the lucrative contract -- although the exact details have been a closely guarded secret. However, because of spending cuts, the need for a new bomber may go unmet -- possibly permanently.
As Breaking Defense put it, "Underinvestment in procurement and research and development will inevitably lead to a loss of capability in the defense industrial base as companies shift resources into more stable and profitable business lines."
What to watch
The Air Force has requested $400 million for LRSB acquisition strategy in FY2014. If it's approved, that will be great news for Boeing, Lockheed, and Northrop, as a bomber contract promises to be incredibly profitable. If it's not, it could affect Air Force readiness. Right now the Air Force bomber fleet consists of 76 B-52s, 61 B-1s, and 20 B-2s. The B-2s, often called the Bat Wing or Flying Wing, are the newest, but are also the most costly at $3 billion per unit and a cost of $135,000 per flight hour. In fact, it's the grandpa of the group, the B-52s, that the Air Force mainly relies on.
But the B-52s can keep flying forever, and the Air Force knows it. That's why it wants new bombers by 2020. Will the Air Force get this need met? Only time will tell, but as this story develops, I'll be sure to bring you updates.