WASHINGTON, March 21 (Reuters) - U.S. President Donald

Trump on Friday awarded Boeing ( BA ) the contract to build the

U.S. Air Force's most sophisticated fighter jet, handing the

company a much-needed win.

The Next Generation Air Dominance program will replace

Lockheed Martin's ( LMT ) F-22 Raptor with a crewed aircraft built to

enter combat alongside drones. The plane's design remains a

closely held secret, but would likely include stealth, advanced

sensors, and cutting-edge engines.

Shares of Boeing ( BA ) were up 5% after the news. The

Seattle-based company beat out Lockheed Martin ( LMT ) for the

deal. Lockheed's shares fell nearly 6%. Reuters reported

Boeing's ( BA ) victory before the official announcement.

Trump, the 47th U.S. president, announced the winner from

the White House, saying the new jet will be called the F-47.

For Boeing ( BA ), the win marks a reversal of fortune for a

company that has struggled on both the commercial and defense

sides of its business. It is a major boost for its St. Louis,

Missouri, fighter jet production business.

The engineering and manufacturing development contract is

worth more than $20 billion. The winner will eventually receive

hundreds of billions of dollars in orders over the contract's

multi-decade lifetime.

NGAD was conceived as a "family of systems" centered around

a sixth-generation fighter to counter adversaries such as China

and Russia.

Boeing's ( BA ) commercial operations have struggled as it attempts

to get its best-selling 737 MAX jet production back up to full

speed, while its defense operation has been weighed down by

underperforming contracts for mid-air refueling tankers, drones

and training jets.

Cost overruns at the KC-46 mid-air refueling tanker program

have surpassed $7 billion in recent years, while another

fixed-price contract to upgrade two Air Force One planes has

created a $2-billion loss for the top 5 U.S. defense contractor.

Lockheed, which was recently eliminated from the competition

to build the Navy's next-generation carrier-based stealth

fighter, faces an uncertain future in the high-end fighter

market after the loss.

Billionaire and presidential adviser Elon Musk has voiced

skepticism about the effectiveness of crewed high-end fighters,

saying cheaper drones were a better option.

While Lockheed could still protest the award to Boeing ( BA ), the

fact Trump announced the deal in a high-profile Oval Office

press conference could reduce the possibility of a public airing

of arguments against the agreement from the Bethesda,

Maryland-based defense firm.