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Lockheed Martin C-130J Contract Raised to 25 Billion Amid Allied Demand

The U.S. increases Lockheed Martin’s C-130J contract ceiling to $25B, extending production and support through 2035 due to growing allied demand.

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This article summarizes reporting by Reuters.

Lockheed Martin C-130J Contract Ceiling Raised to $25 Billion Amid Surge in Allied Demand

The United States government has authorized a significant expansion of its logistical Military-Aircraft agreement with Lockheed Martin, increasing the cumulative value of an existing contract by $10 billion. As reported by Reuters, the modification raises the total Contracts ceiling from $15 billion to $25 billion, securing long-term production and engineering support for the C-130J Super Hercules program.

The announcement was issued on Tuesday, December 23, 2025, by the Department of War, the agency formerly known as the Department of Defense, recently rebranded under a new executive directive. The contract modification ensures that Lockheed Martin’s Aeronautics division in Marietta, Georgia, will continue to deliver, develop, and sustain the C-130J platform through July 2035.

According to official contract data, this is not a single purchase order but an administrative expansion of an Indefinite-Delivery/Indefinite-Quantity (IDIQ) vehicle originally awarded in 2020. The adjustment accommodates a growing backlog of international orders from key allies in the Indo-Pacific and Europe.

Contract Specifications and Scope

The modification, identified as P00014 to contract FA8625-20-D-3000, reflects the enduring relevance of the C-130J airframe in modern military logistics. The Department of War stated that the work will encompass the “delivery, development, integration, and engineering” of the aircraft.

Key details of the agreement include:

  • Contractor: Lockheed Martin Corp., Marietta, Georgia.
  • New Ceiling Value: $25 billion (up from $15 billion).
  • Completion Date: July 16, 2035.
  • Primary Function: Tactical airlift production and sustainment.

While the Reuters report highlighted the top-line financial increase, further analysis of the contract vehicle reveals that this funding ceiling supports Foreign Military Sales (FMS). The Pentagon noted “known congressional interest” in the deal, likely due to the scale of the modification and the strategic importance of the allied nations involved.

Global Demand Drives Production

The $10 billion increase is largely driven by a surge in demand from international partners seeking to modernize their airlift capabilities. As geopolitical tensions rise in both the Indo-Pacific and the Arctic, nations are standardizing on the C-130J to ensure interoperability with U.S. forces.

Indo-Pacific Deterrence

Australia has emerged as a primary driver of this backlog. In 2023, the Australian Department of Defence committed approximately $9.8 billion to expand its fleet from 12 to 20 C-130J aircraft. This acquisition is designed to bolster logistics chains across the vast distances of the Pacific. Similarly, New Zealand has begun taking Delivery of new Super Hercules aircraft to replace its aging C-130H fleet, and the Philippines is modernizing its airlift capacity to support maritime security in the South China Sea.

European Modernization

In Europe, the focus remains on interoperability and Arctic readiness. Norway is upgrading its fleet to the Block 8.1 standard, which enhances navigation and communication systems for operations in the High North. Meanwhile, Germany and France have operationalized a unique joint C-130J squadron based in Évreux, France, sharing costs and maintenance burdens to fill the gap left by the retired C-160 Transall.

Strategic Context and Market Impact

This contract announcement comes during a period of significant administrative change within the U.S. government. The release was issued under the header of the “Department of War,” reflecting a 2025 executive order that reverted the agency’s name to its pre-1947 moniker. Secretary Pete Hegseth has championed this rebranding as part of a broader initiative to “refocus on warfighting.”

Despite the magnitude of the contract, market reaction was muted. Lockheed Martin stock (NYSE: LMT) closed slightly down (-0.21%) on the day of the announcement. Market analysts have largely maintained a “Hold” rating on the defense giant, balancing the long-term revenue security of the C-130J program against concerns over high valuation multiples in the defense sector.

AirPro News Analysis

The decision to raise the contract ceiling by such a drastic margin, $10 billion, signals that the U.S. government expects the C-130J to remain the global standard for tactical airlift well into the 2040s. While next-generation vertical lift platforms are in development, they have yet to match the payload-range economics of the Super Hercules.

For the workforce in Marietta, Georgia, this modification provides a decade of stability. However, the explicit mention of “congressional interest” suggests that lawmakers are closely watching how the newly rebranded Department of War manages these mega-contracts. The shift in terminology to “War” is more than cosmetic; it aligns with a more aggressive posture in foreign military sales, prioritizing speed of delivery to allies over traditional bureaucratic hurdles.

Frequently Asked Questions

What is an IDIQ contract?
Indefinite-Delivery/Indefinite-Quantity (IDIQ) contracts provide for an indefinite quantity of services or supplies during a fixed period. They allow the government to place orders as needed without negotiating a new contract each time. The $25 billion figure represents the maximum value (ceiling) of orders that can be placed, not a guaranteed payout.

Why is the agency referred to as the Department of War?
In the timeline of this report (December 2025), the Trump administration issued an executive order reverting the Department of Defense to its original name, the Department of War, to emphasize a shift in military philosophy.

Which countries are buying these aircraft?
The primary international customers driving this contract increase include Australia, Germany, Norway, New Zealand, the Philippines, and Egypt.

Sources

  • Reuters
  • U.S. Department of War (Contracts Dec. 23, 2025)
  • Australian Department of Defence

Photo Credit: PACOM

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Defense & Military

Hermeus Quarterhorse Mk 2.1 Achieves Mach 1.21 Supersonic Flight

Hermeus reached Mach 1.21 with the Quarterhorse Mk 2.1 on May 26, 2026, backed by a $219M DIU contract.

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Hermeus achieved its first uncrewed supersonic flight on May 26, 2026, when the Quarterhorse Mk 2.1 reached Mach 1.21 over the White Sands Missile Range in New Mexico. The flight testing was conducted from Spaceport America.

The milestone flight, detailed in a series of company press releases, coincided with a $159 million contracts modification from the Defense Innovation Unit (DIU) announced on May 28, 2026. The expanded agreement raises the total contract ceiling to $219 million, funding further high-Mach flight and high-speed payload release demonstrations for the U.S. Air Force (USAF) and U.S. Navy (USN).

Supersonic flight and rapid prototyping

The Quarterhorse Mk 2.1 reached supersonic speeds on its third test flight. The event occurred exactly 364 days after the maiden flight of the company’s first aircraft, the Mk 1. Hermeus is utilizing a rapid iteration strategy, with the Mk 2.1 serving as the first of three planned F-16-scale supersonic uncrewed aircraft. Subsequent variants, designated Mk 2.2 and Mk 2.3, are slated for future testing.

The Quarterhorse Mk 2.1 is powered by a Pratt & Whitney F100 engine. Former Chief Executive Officer AJ Piplica stated that the U.S. Department of Defense is closely monitoring the program’s speed and development timeline.

“This flight demonstrates a pace of execution that is extremely rare in modern aviation,” Piplica said. “This program is about moving high-Mach capability out of the lab and into an operationally relevant environment. By delivering flight-ready aircraft and demonstrating payload release at speed, we will prove this technology can create a decisive military advantage on a timeline that matters.”

Defense Innovation Unit contract expansion

The financial backing from the DIU underscores growing military interest in operationalizing hypersonic and high-Mach technologies. The $159 million modification secures funding for flight tests scheduled throughout 2026 and 2027.

Major General Joe “Solo” Kunkel, Military Deputy for the DIU, emphasized the strategic necessity of the technology for future military operations.

“As you look towards the future, and the military problems we’re facing, the issues are generally around time and distance, and how do you get to these far-off places at a timeframe that matters,” Kunkel said. “I care about the warfighting capability, providing advantage to our partners and us in the fight, and making sure that we can walk into every fight with swagger.”

Executive leadership transition

To manage the transition from prototyping to scaled operations, Hermeus restructured its executive team in mid-2026. Zach Shore assumed the role of Chief Executive Officer on June 1, 2026, succeeding co-founder AJ Piplica, who transitioned to Executive Chairman. The company subsequently appointed Sameer Rao as Chief Financial Officer on July 22, 2026.

Shore noted that the company is managing more parallel lines of effort than at any previous point in its history. He stated his focus remains on delivering capabilities to the military by executing flight campaigns and scaling the business effectively. The leadership changes follow a $350 million Series C funding round, bringing the total private capital raised by Hermeus to more than $500 million.

AirPro News analysis

The 364-day turnaround between the maiden flight of the Quarterhorse Mk 1 and the supersonic flight of the Mk 2.1 validates the hardware-rich, rapid-iteration approach Hermeus has championed. We view the $159 million DIU contract modification as a strong signal that the U.S. Department of Defense is willing to bypass traditional, decades-long procurement cycles in favor of venture-backed aerospace models. By utilizing proven propulsion systems like the Pratt & Whitney F100 engine in uncrewed, scalable airframes, Hermeus reduces developmental risk while accelerating the timeline for fielding high-speed payload delivery systems.

Sources: Hermeus

Photo Credit: Hermeus

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A-10C Thunderbolt II Final Flight at Davis-Monthan AFB

The U.S. Air Force completed the A-10C Warthog’s final flight at Davis-Monthan AFB on July 29, 2026.

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The United States Air-Forces completed the final flight of the A-10C Thunderbolt II at Davis-Monthan Air Force Base on July 29, 2026, closing a nearly 50-year chapter of close air support operations and training at the Arizona installation. The departure marks a definitive step in the military branch’s broader divestment strategy for the aging attack aircraft, shifting resources toward newer platforms.

Announced in a July 31, 2026, press release by the 355th Wing Public Affairs office, the final flight was conducted by the 357th Fighter Squadron. Davis-Monthan has historically served as the primary training hub for A-10 pilots and a central base for the aircraft’s operational deployment.

End of an era at Davis-Monthan

The A-10C Thunderbolt II, colloquially known as the Warthog, has been a fixture on the ramp at Davis-Monthan for five decades. The 355th Operations Group and the 357th Fighter Squadron oversaw the final departure, which involved a ceremonial “fini flight” to mark the end of the airframe’s tenure at the base.

Leadership at the installation acknowledged the historical weight of the transition. Lt. Col. Rodney Dwyer, commander of the 355th Operations Group, noted the visual impact of the divestment on the facility.

“We’ve always had A-10s on the ramp; for the last 50 years they’ve been on the ramp. To see the sunshades get torn down, to see the jets divest, fewer and fewer A-10s out there … it’s definitely bittersweet,” Dwyer stated in the release.

Chief Master Sgt. Dave Anderson Jr., the Senior Enlisted Leader for the 355th Operations Group, emphasized the cultural legacy the aircraft leaves behind for the maintenance and support personnel who sustained it. He described the A-10 community as a mindset rather than just a collection of people or equipment, expressing hope that the attack aviation culture would continue to influence other airframes and organizations within the Air Force.

Infrastructure and training closures

The final flight follows a series of structural shutdowns for the A-10 program across the Air Force. The infrastructure supporting the aircraft has been systematically deactivated over the past year.

On April 3, 2026, the 357th Fighter Squadron graduated its final class of A-10 student pilots at Davis-Monthan, effectively closing the Training pipeline for new aviators on the platform. The base subsequently hosted its final public A-10 Range Day at the Barry M. Goldwater Range on June 24 and 25, 2026.

Prior to the training pipeline closure, the Air Force officially concluded A-10 depot-level maintenance in February 2026. This milestone was marked by the deactivation of the 571st Aircraft Maintenance Squadron at Hill Air Force Base in Utah, signaling the end of major structural overhauls and long-term sustainment for the fleet.

Legislative friction over divestment

The Air Force has actively pursued the retirement of the A-10 fleet to reallocate funding and personnel toward modernization efforts, specifically the Lockheed Martin F-35A Lightning II program. However, the divestment strategy has faced consistent resistance from lawmakers.

According to reporting by Military.com, Congress has repeatedly intervened to slow the retirement of the close air support aircraft. The fiscal year 2026 National Defense Authorization Act (NDAA) included provisions extending the A-10’s service life to 2030. The legislation also barred the Air Force from reducing the active fleet below 103 aircraft through September 2026.

AirPro News analysis

We observe a stark disconnect between legislative mandates and operational reality regarding the A-10C Thunderbolt II. While Congress has legally extended the aircraft’s service life to 2030, the Air Force has effectively dismantled the foundational infrastructure required to sustain the fleet.

By closing the pilot training pipeline at Davis-Monthan and terminating depot-level maintenance at Hill Air Force Base, the military has created a scenario where the remaining airframes will become increasingly difficult to operate and maintain. Without a steady influx of new pilots and the capacity for heavy maintenance, the statutory minimum of 103 aircraft becomes a paper metric rather than a measure of combat readiness. The final flight at Davis-Monthan signals that the operational end of the A-10 is proceeding on the ground, regardless of the ongoing debates in Washington.

Sources: U.S. Air Force

Photo Credit: U.S. Air Force

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Pratt & Whitney Wins $1.3B F135 Spare Parts Contract

Pratt & Whitney secures a nearly $1.3B IDIQ contract for F135 engine spare parts supporting the global F-35 fleet in FY2026.

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Pratt & Whitney has secured a nearly $1.3 billion undefinitized contracts to supply F135 engine spare parts for the global F-35 Lightning II fleet during fiscal year 2026.

Announced in a July 31, 2026, press release by parent company RTX Corporation, the Indefinite Delivery, Indefinite Quantity (IDIQ) award funds initial spare parts, deployable spare packages, depot lay-ins, and associated support equipment across all three variants of the combat Military-Aircraft.

Global sustainment and fleet readiness

The F135 sustainment enterprise currently supports operations at 42 bases and 13 ships worldwide. With more than 1,500 production engines delivered to date, the propulsion system is operated by 20 allied nations.

“Ensuring the F135 remains mission-ready is critical to the success of the F-35 enterprise,” stated Chris Johnson, Vice President of Pratt & Whitney’s F135 Program. “This contract will help strengthen our global sustainment network to ensure operators around the world can continue to rely on the F135’s unmatched performance.”

Modernization and contracting context

Pratt & Whitney plans to leverage this established sustainment network to deploy the F135 Engine Core Upgrade (ECU). The ECU has been selected as the Propulsion modernization solution for the F-35, designed to enhance fleet readiness and provide long-term capability.

While the RTX announcement did not explicitly name the awarding agency, defense contracting for the F135 propulsion system is primarily managed by the U.S. Department of Defense (DoD) Naval Air Systems Command (NAVAIR), according to reporting by Dow Jones Newswires.

AirPro News analysis

We note that undefinitized contracts allow contractors to begin work before all terms and prices are finalized, a mechanism often utilized by the DoD to prevent delays in critical supply chains. Securing spare parts funding for fiscal year 2026 ensures that the expanding global footprint of the F-35 will not outpace the logistical support required to keep the aircraft operational. As the F135 Engine Core Upgrade transitions from development to deployment, maintaining a robust baseline sustainment network will be essential for integrating the modernized components across international operators.

Sources: RTX

Photo Credit: RTX

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