*

Next-gen jet fighter program budget of $28.5 billion over

five

years may be spread out or scaled back

*

Cost overruns in other programs force Air Force to

reassess

spending priorities

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Air Force reconsiders fundamental design elements of next

jet

By Mike Stone

WASHINGTON, July 22 (Reuters) - The U.S. Air Force's

ambitious next-generation fighter jet program, envisioned as a

revolutionary leap in technology, could become less ambitious as

budget pressure, competing priorities and changing goals compel

a rethink, defense officials and industry executives said.

Initially conceived as a "family of systems" centered around

a sixth-generation fighter jet, the Next Generation Air

Dominance (NGAD) program is meant to replace the F-22 Raptor and

give the United States the most powerful weaponry in the sky

well into the mid-21st century.

When it was first proposed, expectations were high,

including an unmatched stealth capability to keep it invisible

from even the most sophisticated radar, laser weapons and

onboard artificial intelligence to process masses of data coming

from the latest in sensor technology.

However, sources said the current development budget of

$28.5 billion over five years ending in 2029 could be spread out

over more time or scaled-back as the Pentagon searches for a

cost-effective solution.

Sources briefed on the Air Force's internal budget

deliberations said the anticipated 2026 fiscal-year NGAD budget

of $3.1 billion would be slashed as funding shrinks, with one

source adding that diminishing funds could stretch development

by two more years.

While it is unclear how much the overall program will cost,

it could eventually total well over $100 billion if 200 aircraft

are produced, including initial costs - plus maintenance and

upgrades over time. There are currently 185 F-22s in service -

the plane NGAD is meant to replace.

The Air Force is also reviewing the concept for the jet -

perhaps moving to a larger single-engine jet, from what is

believed to be a two-engine design, or even shifting more

funding to a less expensive unmanned drone to best address

future air superiority needs given the potential budget cuts,

industry experts said.

"NGAD was conceived before a number of things: before the

threat became so severe, before CCAs (drone program) were

introduced into the equation and before we had some issues with

affordability that we are currently facing," Air Force Secretary

Frank Kendall said on Saturday at Britain's Royal International

Air Tattoo, the world's largest military air show.

"Before we commit to the 2026 budget, we want to be sure we

are on the right path," he added on a program that will be a

popular talking point at the Farnborough International Airshow

this week.

The shift in focus comes as the Air Force grapples with

substantial cost overruns in several vital, and expensive,

programs. For example, its Sentinel intercontinental ballistic

missile (ICBM) program, which is set to replace the aging

Minuteman III missiles, has ballooned 81% over budget, to around

$141 billion.

Budget pressure has forced the Air Force to reassess its

spending priorities across various modernization efforts which

also include increasing production of the new B-21 bomber made

by Northrop Grumman ( NOC ).

U.S. aerospace and defense companies Lockheed Martin ( LMT )

and Boeing ( BA ) have responded to the Air Force's request for

proposal for the NGAD system, sources told Reuters.

While defense firms are not exactly desperate for orders

with conflicts in Ukraine and Israel driving already-strong

demand, NGAD was one of several potentially giant programs many

hoped would feed the bottom line in the years ahead.

An Air Force spokesperson told Reuters the department is

currently building its fiscal 2026 budget which will be released

early next year. Representatives for Boeing ( BA ) did not return

requests for comment. Lockheed would not comment on NGAD.

"The part that seems to be getting stalled and re-evaluated

is the air vehicle itself, the central platform," said J.J.

Gertler, a senior analyst at aerospace and defense analysis firm

the Teal Group.

"The Air Force is now making sure that that's what they

actually want and possibly changing their mind," he added.

Possible new configurations might be shifting to a single

engine for the jet to save on up-front cost and long-term

maintenance. Twin-engine jets are much more expensive to buy and

operate, but they are more dependable and faster, therefore more

deadly in a dogfight than their single-engine foes.

Another key component emerging from this restructuring is

the possibility of shifting funds toward the unmanned fighter

drone known as the Collaborative Combat Aircraft initiative.

Development of the less expensive drone platforms, designed

to operate alongside the main jet, does not face budget

changes.