One year ago, defense contractor Textron (NYSE:TXT) announced plans to build a new, budget-priced fighter jet. Now, the new Textron Scorpion could soon land its very first sale -- and perhaps go to war with ISIS.

Scorpion
Textron's Scorpion is still in search of its first buyer. Will the United Arab Emirates sign on the dotted line? Photo: Textron.

According to a Nov. 2 DefenseNews.com report, the United Arab Emirates is looking to beef up its air force, and is giving the Scorpion a good hard look. As well it should.

A bit of background
Last year, the UAE scotched plans to buy Typhoon fighter jets from BAE Systems (NASDAQOTH:BAESY). Similarly, the Arab nation's plans to purchase as many as four dozen M-346 trainer jets from Italy appear to have hit a snag. Yet even as the UAE's air force seems starved for new planes, the country has taken on a role supporting U.S. airstrikes against ISIS insurgents in Syria.

The UAE is using F-16 fighter jets to pound ISIS targets on the ground -- as is the United States. But using high-performance fighters for ground attacks is overkill. It would be more cost-effective to conduct these kinds of raids with cheap, light attack fighters -- such as Textron's Scorpion.

The Scorpion is estimated to cost less than $20 million per plane (and perhaps as little as $17 million). In contrast, deagel.com puts the unit cost of the Typhoons that UAE recently passed on at $124 million apiece -- on par with the price tag of a Lockheed Martin (NYSE:LMT) F-35. And even the Italian M-346, a light attack aircraft that the UAE has been looking at as a possible jet trainer, is estimated to cost $48 million apiece -- more than twice the cost of a Textron Scorpion.

Good enough for the job?
Granted, at a top speed of 500 mph, the subsonic Textron Scorpion wouldn't be of much use in a dogfight. Italy's M-346 and Eurofighter's Typhoon both have longer "legs." But for the limited purposes of intelligence, search, and reconnaissance, or for plinking ISIS tanks and Toyotas in the desert, 500 mph should more than do the trick. To emphasize the point, Textron advertises the Scorpion as coming complete with a bomb capacity of 3,000 pounds, along with six "hard points" for carrying rockets and bombs under its wings.

When you take out your calculator, and discover that for the price of a single M-346 you could buy two-and-a-half Scorpions -- or six Scorpions for the cost of just one Typhoon -- the case for buying Textron's new fighter jet only gets stronger.

Scorpion
Textron's Scorpion -- a fighter jet "grounded" in the reality of tight defense budgets. Photo: Flickr.

What it means for investors
With Textron profitable on a generally accepted accounting principles basis and rolling in cash (with more than $1.1 billion in trailing free cash flow, according to the latest data from S&P Capital IQ), the Scorpion is hardly a make-or-break deal for the defense contractor. That said, the company did develop the Scorpion internally, without funding from the Pentagon, so it would dearly like to make a return on that investment.

Winning a first customer for Scorpion -- which could lend confidence to other buyers considering the Scorpion -- has proven an elusive goal. The prospect that Textron might finally have found its first buyer, though, should lend the company's investors a bit of confidence.

Textron has built Scorpion. It priced the jet right. All that remains now is for the first customer to arrive.

Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin 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.