Defense & Military
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.
This article summarizes reporting by Reuters.
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.
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:
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.
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.
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. 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.
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.
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.
What is an IDIQ contract? Why is the agency referred to as the Department of War? Which countries are buying these aircraft?
Lockheed Martin C-130J Contract Ceiling Raised to $25 Billion Amid Surge in Allied Demand
Contract Specifications and Scope
Global Demand Drives Production
Indo-Pacific Deterrence
European Modernization
Strategic Context and Market Impact
AirPro News Analysis
Frequently Asked Questions
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.
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.
The primary international customers driving this contract increase include Australia, Germany, Norway, New Zealand, the Philippines, and Egypt.Sources
Photo Credit: PACOM
Defense & Military
Turkish Air Force F-16 Crashes Near Balıkesir Killing Pilot
A Turkish Air Force F-16 crashed during a mission flight near Balıkesir, resulting in the pilot’s death. Investigation into the cause is ongoing.
This article summarizes reporting by Times of India and TOI World Desk.
A Turkish Air Force F-16 fighter jet crashed during a mission flight in the early hours of Wednesday, February 25, 2026, resulting in the death of its pilot. The aircraft went down in the western province of Balıkesir shortly after taking off from a local air base.
According to reporting by the Times of India, the jet was assigned to the 9th Main Jet Base Command. Contact with the aircraft was lost minutes into the flight, prompting an immediate search and rescue operation that subsequently located the wreckage near a major highway.
The F-16 reportedly took off around 00:50 local time for a scheduled mission. Radar and radio contact were lost shortly after departure. Footage circulating on social media and cited by the Times of India appears to show the aircraft descending near the Istanbul-Izmir highway, followed by a fire at the impact site.
Emergency teams, including police and medical units, were dispatched to the scene immediately after the alarm was raised. The wreckage was discovered scattered across a wide area near the highway, confirming the total loss of the airframe.
The Turkish Ministry of National Defense confirmed the pilot’s death in a formal statement. Officials used the term “martyred” to describe the loss of the service member. Balıkesir Governor İsmail Ustaoğlu also addressed the incident publicly.
“One of our F-16 aircraft belonging to the squadron of the Balıkesir 9th Main Jet Base Command crashed during a mission flight around 00:50, and one of our pilots has been martyred.”
Balıkesir Governor İsmail Ustaoğlu (via Times of India)
The Balıkesir Public Prosecutor’s Office has launched a judicial investigation into the crash. Justice Minister Akın Gürlek stated that prosecutors have visited the site to begin their examination. As of Wednesday morning, the specific cause of the crash, whether technical failure or other factors, remains under investigation. The 9th Main Jet Base in Balıkesir is a critical hub for Turkey’s F-16 operations, often hosting “Cobra” and “Tiger” squadrons. While F-16s are a staple of the Turkish Air Force, night mission accidents highlight the inherent risks of high-tempo military aviation operations. The proximity to the Istanbul-Izmir highway suggests the pilot may have been attempting to avoid populated areas or infrastructure during the descent, though this will only be confirmed by the flight data recorder analysis.
Sources: Times of India
Flight Details and Crash Timeline
Official Statements and Investigation
AirPro News analysis
Photo Credit: X
Defense & Military
Virginia Approves $97.7M Incentive for Avio USA Rocket Factory
Avio USA plans a $500M solid rocket motor factory in Virginia with 1,000+ jobs, backed by a $97.7M state incentive package.
This article is based on an official press release from Avio.
Avio USA, the American subsidiary of Italian aerospace leader Avio S.p.A., has selected Hurt, Virginia, as the site for a new solid rocket motor (SRM) manufacturing facility. According to an official announcement from the company, the project represents a capital investment of more than $500 million and is expected to create over 1,000 jobs in Pittsylvania County.
The selection follows the approval of a significant incentive package by state officials. Subject to final sign-off by the Virginia General Assembly, Avio USA will be eligible for a Major Employment and Investment Project (MEI) special appropriation of up to $97.7 million. The facility will focus on producing motors for defense systems, tactical propulsion, and commercial space sectors.
The new facility aims to address critical supply chain needs in the U.S. defense industrial base. In a company press release, Avio USA CEO VADM (Ret.) James Syring emphasized that the factory would directly support efforts to ramp up missile production for government customers.
“With more than a century of propulsion leadership, Avio’s proven capabilities, industrial expertise, and enduring legacy uniquely position us to strengthen and scale the U.S. defense industrial base.”
, VADM (Ret.) James Syring, CEO of Avio USA
Governor Abigail Spanberger welcomed the deal as a “historic investment” for Southern Virginia. She noted that the project would revitalize domestic production of essential defense technologies while boosting the local economy through high-quality employment opportunities.
The factory will be located in Hurt, a town in Pittsylvania County. Secretary of Commerce and Trade Carrie Chenery highlighted the region’s “prepared sites, skilled workforce, and strong regional partnerships” as key factors in securing the project. The $97.7 million incentive package reflects the scale of the commitment, which state leaders believe will cement Virginia’s status as a hub for advanced manufacturing.
According to Avio, the site selection process was influenced by the state’s “business-friendly climate” and the Virginia Talent Accelerator program, which assists companies in recruiting and training specialized workforces. The establishment of a new SRM factory in the United States comes at a pivotal moment for the global defense industry. Since the early 2020s, Western nations have faced significant bottlenecks in the production of solid rocket motors, which are essential for everything from shoulder-fired anti-tank weapons to strategic missile interceptors.
By localizing production in Virginia, Avio USA is likely positioning itself to capture a larger share of U.S. Department of Defense contracts, reducing reliance on the limited number of existing domestic suppliers. This move aligns with broader Pentagon initiatives to diversify the supply chain and eliminate single points of failure in the production of tactical munitions.
What will the new Avio USA factory produce? How many jobs will be created? What is the value of the incentives offered?
Virginia Approves $97.7M Incentive Package for Avio USA’s New Rocket Factory
Strategic Investment in Defense Capabilities
Location and Economic Impact
AirPro News analysis
Frequently Asked Questions
The facility will manufacture solid rocket motors (SRMs) used in defense missile systems, tactical propulsion, and commercial space launch vehicles.
Avio USA projects the creation of more than 1,000 jobs in Pittsylvania County.
Virginia has proposed a special appropriation of up to $97.7 million, contingent on the company meeting its investment target of over $500 million.
Sources
Photo Credit: Avio
Defense & Military
GE Aerospace Awarded Contract to Enhance USAF T-38 Engine Readiness
GE Aerospace partners with DLA and Palantir to use AI for predictive logistics, improving readiness of the USAF T-38 Talon’s J85 engine amid T-7A delays.
This article is based on an official press release from GE Aerospace and includes additional context from industry reports.
GE Aerospace has secured a contract with the Defense Logistics Agency (DLA) to implement advanced digital fleet management capabilities for the J85 engine, the power plant behind the U.S. Air Force’s primary training aircraft, the T-38 Talon. Announced on February 24, 2026, the agreement aims to improve readiness rates for the aging training fleet through the use of AI and predictive analytics.
According to the company’s official statement, this marks the first application of GE’s “TrueChoice™ Defense” digitally enabled contract model for the J85 engine. The program is designed to shift maintenance strategies from reactive repairs to predictive supply chain optimization, ensuring that the Air-Forces can maintain pilot training schedules despite the advanced age of the T-38 fleet.
The contract structure includes an initial seven-month base period, followed by a four-year, five-month option period. Under this agreement, GE Aerospace will collaborate with data analytics firm Palantir to integrate disparate data streams across the U.S. Air Force, the DLA, and GE’s own enterprise systems.
The core technical objective of the contract is to consolidate data from over 6,000 individual J85 engine parts to predict supply needs before they become critical bottlenecks. By utilizing Palantir’s platform, the program aims to provide a unified view of the sustainment ecosystem, allowing decision-makers to identify emerging constraints months in advance.
In the press release, GE Aerospace noted that the contract builds upon a successful test program. This pilot effort demonstrated that advanced analytics could significantly improve supply chain visibility and reduce delays, which have previously hampered the availability of training aircraft.
“This contract directly supports increased readiness for the J85 engine and the U.S. Air Force’s primary training fleet. By integrating data across the enterprise and applying AI to predict demand and identify constraints earlier, we are helping the Air Force keep more aircraft available to ensure our airmen get the training required to execute on their mission.”
, Asha Belarski, General Manager of Customer Support and Sustainment for Defense & Systems, GE Aerospace
While the press release focuses on the technical capabilities of the new contract, industry context highlights the urgency of maintaining the T-38 fleet. The T-38 Talon has been in service since the 1960s and serves as the primary jet trainer for Air Force fighter and bomber pilots. According to defense sector reporting, the fleet has faced significant readiness challenges in recent years, with engine repair delays contributing to pilot training backlogs in 2023 and 2024. The sustainment of the J85 engine is critical due to delays in the T-38’s replacement program. The Boeing-Saab T-7A Red Hawk, originally scheduled to replace the Talon sooner, has faced production and development hurdles. With full-rate production of the T-7A delayed until 2026 and Initial Operational Capability (IOC) estimated for the 2027–2028 timeframe, the Air Force must rely on the T-38 for several more years. This GE Aerospace contract serves as a vital bridge, ensuring the legacy fleet remains operational until the next generation of trainers comes online.
This contract represents a broader shift within the Pentagon toward “predictive logistics.” Historically, defense maintenance has often been reactive, fixing components after they fail or ordering parts only when inventory runs low. The partnership between GE Aerospace and Palantir signifies a move toward commercial-style “just-in-time” logistics, adapted for the rigors of military operations.
By integrating data silos, where the DLA, the Air Force, and the OEMs (Original Equipment Manufacturer) previously held separate datasets, the program attempts to eliminate the “fog of logistics.” For the Air Force, the success of this program is not just about engine health; it is directly tied to the pilot production pipeline. If the T-38s cannot fly due to missing turbine blades or washers, the output of new fighter pilots stalls, creating downstream readiness issues for combat squadrons.
The General Electric J85 is a small, single-shaft turbojet engine. It is one of GE’s most successful military engines and has powered the Northrop T-38 Talon since the aircraft entered service in 1961.
The T-38 fleet is over 60 years old and requires intensive maintenance to remain airworthy. With the replacement T-7A Red Hawk delayed, the Air Force needs to extend the life and reliability of the T-38 to prevent gaps in pilot training. This contract uses AI to ensure parts are available to keep the jets flying.
GE Aerospace is partnering with Palantir Technologies to use their data integration and AI platforms. Palantir’s software will aggregate data from the Air Force, DLA, and GE to predict part failures and supply shortages before they occur.
GE Aerospace Selected by DLA to Enhance T-38 Readiness via AI-Driven Logistics
Integrating AI into Defense Supply Chains
Strategic Context: Bridging the Gap to the T-7A
AirPro News Analysis
Frequently Asked Questions
What is the J85 engine?
Why is this contract necessary now?
What is the role of Palantir in this agreement?
Sources
Photo Credit: GE Aerospace
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