US Navy's new fighter jet threatened by funding dispute, sources say

By Mike Stone

WASHINGTON, May 14 (Reuters) - The U.S. Navy and Congress are battling with the Trump administration to keep moving forward with a contract award to build the Navy's next-generation fighter jet, according three people with knowledge of the matter.

At the heart of the conflict is the F/A-XX program, intended to replace the Navy's aging Boeing BA.N F/A-18 Super Hornet fleet with a new carrier-based stealth fighter to be fielded in the 2030s.

The Navy had been expected to announce a winner as early as March in a deal that could be worth hundreds of billions of dollars to the winner over its lifetime, but a funding dispute threatens to derail that timeline.

While the Navy wants to move forward with awarding a contract, some Pentagon officials are seeking to delay the program by up to three years, the people said, citing concerns about engineering and production capacity.

In March, the U.S. Air Force awarded Boeing a contract to make F-47 fighter jets, its version of a 6th generation stealth fighter to replace the 5th generation F-22. The Air Force has said it planned to buy more than 185 of the planes.

Boeing and Northrop Grumman NOC.N remain in competition for the Navy contract, while Reuters reported in March that Lockheed Martin LMT.N had been eliminated from the contest.

A three-year delay for the Navy would effectively cancel the program as it is currently defined, the people said, because contracts and pricing would expire during that time making a new competition almost inevitable.

The Navy declined to comment. A Pentagon spokesperson said it did "not comment on internal communications and pre-decisional or deliberative information."

The fight over F/A-XX funding highlights broader questions about the future of naval aviation and the role of aircraft carriers in confronting China. Delaying the program could leave the Navy without a modern fighter capable of operating from carriers in the 2030s and beyond, potentially undermining the fleet's ability to project power in contested environments.

China has already made test flights of advanced J-50 and J-36 fighters that it calls 6th generation - the same jet a forward deployed U.S. Navy would encounter.

"America can't do much with its aircraft carriers in 30 years if it doesn't invest in a next-generation fighter for the Navy," said a U.S. official. "Faster decision-making, extended operational reach, integration with autonomous systems, and maximum lethality are key to the future of air combat, especially in the Indo-Pacific," the official added.

The official and the other people declined to be identified due to the sensitivity of the matter.

PENTAGON REVIEWS

U.S. President Donald Trump's administration is making a push to revamp what the Pentagon buys and how it does so for items ranging from software to jets.

Trump adviser Elon Musk has panned crewed fighter jets, calling them "obsolete" as the age of drone warfare dawns. But some defense experts say enemy jamming systems may best the autonomous vehicles, making a human crew necessary in warfare.

The Navy currently has around 128 F/A-18 planes that have been in service since the mid-1990s.

Defense Secretary Pete Hegseth's cost assessment office plans to slash funding for the next-generation jet's development by shifting the $454 million that Congress provided for the F/A-XX in the fiscal year 2025 budget to other programs, according to two industry executives and a congressional aide familiar with the matter.

The Pentagon is separately preparing to ask Congress not to provide $500 million for the program which it had included in a pending reconciliation bill to help to accelerate the new jet's development, the three sources said.

The two separate funding reductions and the potential for a three-year delay to the contract award have not been reported previously.

These moves have sparked pushback from the Navy and key members of Congress. Lawmakers are telling the Navy and the Office of the Secretary of Defense: "Don't you dare do this," an industry executive said, speaking on condition of anonymity to discuss sensitive negotiations.

The Pentagon could still alter course on these efforts and adopt Congress' funding guidance, the congressional aide said.