F-35’s secret upgrade plan risks Boeing’s F-47 market takeover.
In a stunning turn of events, Lockheed Martin, the aerospace giant that has long dominated the stealth fighter market, suffered a rare defeat in March 2025 when Boeing secured the contract to develop the U.S. Air Force’s Next Generation Air Dominance [NGAD] fighter, designated the F-47.
The loss marked a significant blow to Lockheed Martin’s legacy of building America’s premier air superiority jets, including the F-22 Raptor and F-35 Lightning II. But James Taiclet, Lockheed Martin’s CEO and a former U.S. Air Force pilot, is not conceding the fight.
During an earnings call on April 22, 2025, Taiclet revealed an audacious plan to transform the F-35, the world’s most widely deployed stealth fighter, into a “fifth-generation plus” platform that could deliver 80% of the F-47’s sixth-generation capabilities at half the cost. “We think we can get most of the way to sixth-gen at half the cost,” Taiclet told investors, signaling a strategic pivot that could reshape the global fighter jet market.
This bold move raises a provocative question: could Lockheed Martin’s upgraded F-35, backed by a global fleet of over 1,100 aircraft, outmaneuver Boeing’s F-47 and dominate the international market? The answer lies at the intersection of technology, economics, and geopolitics, with implications for the future of American air power and the defense industry worldwide.
The NGAD program, designed to replace the aging F-22 Raptor, represents the cutting edge of military aviation. The F-47, now under development by Boeing, is expected to incorporate advanced features such as modular design, autonomous flight modes, and seamless integration with unmanned Collaborative Combat Aircraft [CCA].
These drones envisioned as loyal wingmen, will enhance the F-47’s ability to dominate contested airspace by providing additional sensors, weapons, and electronic warfare capabilities. While specific details about the F-47 remain classified, the Air Force has emphasized its superior stealth, speed, and maneuverability, with a unit cost estimated at $160 million to $180 million, roughly double that of an F-35.
Boeing’s victory, announced by President Donald Trump on March 21, 2025, was a major coup for the company, which had not secured a stealth fighter contract since losing to Lockheed Martin in the Joint Strike Fighter competition two decades ago. The F-47’s development contract, valued at approximately $20 billion, underscores the high stakes of the NGAD program, which could generate hundreds of billions in revenue over its lifecycle.
Lockheed Martin’s response to this setback is both pragmatic and ambitious. Rather than contest the Air Force’s decision, Taiclet confirmed during the April 22 earnings call that the company would not protest the NGAD award.
Instead, Lockheed Martin plans to leverage technologies developed for its NGAD demonstrator—an unnamed experimental aircraft that flew as early as 2019—to enhance its existing platforms, particularly the F-35. “We are committed to advancing state-of-the-art air dominance to ensure America has the most revolutionary systems to counter the rapidly evolving threat environment,” the company stated in a March 2025 press release following Boeing’s win.
This strategic shift reflects Lockheed Martin’s recognition that the F-35, with its massive global footprint and established infrastructure, offers a unique opportunity to compete with the F-47 without the risks and costs of developing an entirely new aircraft.
The F-35 Lightning II, designed as a family of multirole stealth fighters, is the cornerstone of modern air forces worldwide. Available in three variants—the F-35A for conventional takeoff and landing, the F-35B for short takeoff and vertical landing, and the F-35C for carrier operations—the jet combines advanced stealth, sensor fusion, and network-enabled operations.
Its radar-evading design, with a radar cross-section significantly smaller than that of fourth-generation fighters like the F-16, allows it to penetrate contested environments. The F-35’s AN/APG-81 active electronically scanned array radar and Distributed Aperture System provide 360-degree situational awareness, while its ability to share data with other platforms makes it a force multiplier in joint operations.
As of December 2024, Lockheed Martin had delivered 1,102 F-35s to the U.S. military and allies, including Australia, Japan, South Korea, and numerous NATO members, with plans to produce over 3,500 by the 2040s. Despite its technological prowess, the program has faced criticism for its staggering $2 trillion lifetime cost and persistent maintenance challenges, with operating costs exceeding $35,000 per flight hour in some cases.
Lockheed Martin’s plan to upgrade the F-35 hinges on integrating technologies originally developed for its NGAD demonstrator. While the specifics of this demonstrator remain closely guarded, industry analysts suggest it likely includes advanced sensors, enhanced stealth coatings, and next-generation networking capabilities designed to operate in highly contested environments.
Taiclet’s goal is to incorporate these features into the F-35, potentially through upgrades like the Technology Refresh 3 [TR-3] package, which enhances the jet’s computing power, displays, and weapons integration. The AN/APG-85 radar, a next-generation system under development, could further improve the F-35’s ability to detect and track low-observable targets.
By retrofitting these technologies, Lockheed Martin aims to create a “fifth-generation plus” F-35 that approaches the capabilities of a sixth-generation fighter. For example, improved networking could allow the F-35 to control CCA drones, mirroring one of the F-47’s key features. Enhanced stealth and electronic warfare systems could also enable the F-35 to counter advanced air defenses, such as those deployed by China and Russia.
The economic argument for this strategy is compelling. The F-35’s unit cost, approximately $79 million for the F-35A in recent production lots, is significantly lower than the F-47’s projected price tag. By building on an existing platform, Lockheed Martin can avoid the massive upfront costs of designing a new aircraft, estimated at tens of billions for the NGAD program.
The company has already invested heavily in streamlining F-35 production, with a goal of reducing operating costs to $25,000 per flight hour by 2025. In contrast, the F-47’s development is still in its early stages, with full-rate production not expected until the mid-2030s.
This timeline gives Lockheed Martin a window to deploy upgraded F-35s, potentially capturing market share before the F-47 becomes widely available. Taiclet’s claim of delivering 80% of sixth-generation capabilities at half the cost is ambitious but plausible, given the F-35’s established supply chain and global logistics network.
The F-35’s market dominance is a critical factor in Lockheed Martin’s strategy. With over 1,100 aircraft in service across 17 countries, the F-35 enjoys unparalleled economies of scale. Nations like Canada, which recently committed to purchasing 88 F-35s, and Finland, which selected the jet over competitors like the Saab Gripen, have invested heavily in the platform, creating a robust ecosystem of training, maintenance, and upgrades.
This entrenched position gives Lockheed Martin leverage to offer cost-effective modernization packages, making the upgraded F-35 an attractive option for existing operators. In contrast, the F-47, as a new platform, faces significant hurdles in penetrating international markets.
Allies accustomed to the F-35’s interoperability and support infrastructure may hesitate to invest in a more expensive, unproven aircraft, especially if Lockheed Martin delivers comparable capabilities at a lower price.
Boeing’s F-47, while technologically advanced, must overcome these market dynamics. The jet’s sixth-generation features, including adaptive cycle engines and broadband stealth, promise unmatched performance against near-peer adversaries like China’s J-20 or Russia’s Su-57.
The J-20, China’s fifth-generation stealth fighter, has entered service in significant numbers, with estimates suggesting over 200 units by 2025. It boasts long-range missiles and advanced sensors but lacks the F-35’s network-centric warfare capabilities. Russia’s Su-57, hampered by production delays and sanctions, remains a less immediate threat, with fewer than 20 operational aircraft.
The F-47’s ability to integrate with CCA drones and operate in contested environments could give it an edge over these rivals, but its high cost and lengthy development timeline may limit its appeal to budget-conscious allies. For example, nations like Poland, which recently expanded its F-35 fleet, may prioritize affordability and interoperability over cutting-edge technology.
The geopolitical implications of Lockheed Martin’s strategy are profound. By positioning the F-35 as a near-sixth-generation fighter, the company could reinforce U.S. alliances by offering a cost-effective counter to Chinese and Russian advancements. However, this approach risks creating tensions within the U.S. defense establishment.
The Air Force, which has invested heavily in the NGAD program, may face pressure to scale back F-47 procurement if the upgraded F-35 proves sufficiently capable. This could strain relations between Lockheed Martin and Boeing, as well as between the Pentagon and Congress, where budget debates are already contentious.
Former Air Force Secretary Frank Kendall, who oversaw the NGAD competition, noted in March 2025 that industrial base considerations influenced the decision to award the contract to Boeing, suggesting that Lockheed Martin’s dominance with the F-35 and F-22 factored into the outcome. “In some ways, they needed to win this one more than Lockheed did,” Kendall said of Boeing, highlighting the strategic importance of maintaining competition in the defense industry.
Internationally, the F-35’s upgraded capabilities could reshape the global arms market. If Lockheed Martin succeeds in delivering a “fifth-generation plus” F-35, it could limit the F-47’s export potential, confining it primarily to U.S. forces. This scenario would bolster Lockheed Martin’s position as the world’s leading supplier of stealth fighters, potentially at Boeing’s expense. However, it also raises questions about the long-term viability of the U.S. industrial base.
A market dominated by a single platform, even one as versatile as the F-35, could stifle innovation and reduce the incentive for companies like Boeing to invest in next-generation technologies. Moreover, the F-35’s reliance on incremental upgrades may struggle to keep pace with adversaries like China, which is developing sixth-generation concepts like the J-36, spotted in prototype form in late 2024.
Historically, the U.S. has balanced the development of new fighters with upgrades to existing platforms. The F-15EX, an advanced derivative of the fourth-generation F-15 Eagle, exemplifies this approach, offering near-fifth-generation capabilities at a lower cost than the F-35.
Similarly, the Navy’s F/A-18 Super Hornet has undergone multiple upgrades to remain competitive. Lockheed Martin’s F-35 strategy follows this playbook, leveraging an established platform to bridge the gap until sixth-generation technologies mature. The F-22 Raptor, which the F-47 is designed to replace, faced similar challenges, with production capped at 186 units due to high costs.
The F-47’s proponents argue that its advanced features justify the investment, but Lockheed Martin’s focus on affordability could shift the debate toward evolutionary rather than revolutionary solutions.
The competition between the F-35 and F-47 is more than a corporate rivalry; it is a high-stakes chess match with global consequences. Lockheed Martin’s decision to double down on the F-35 reflects a calculated bet that incremental improvements, backed by economies of scale, can outperform a leap into uncharted territory.
By contrast, Boeing’s F-47 represents a bold vision for the future of air combat, but its success depends on overcoming significant financial and logistical hurdles. For the U.S. and its allies, the outcome will determine not only the shape of their air forces but also their ability to deter adversaries in an increasingly volatile world.
As Taiclet’s plan unfolds, the defense community will watch closely to see if the F-35 can indeed deliver near-sixth-generation performance at a fraction of the cost. If successful, Lockheed Martin could redefine the economics of military aviation, forcing Boeing to fight an uphill battle. Yet, if the F-47 lives up to its promise, it could cement Boeing’s resurgence and shift the balance of power in the industry.
Will the F-35’s global reach and affordability triumph, or will the F-47’s technological edge prevail? The answer may hinge on whether Lockheed Martin can turn its bold vision into reality—or whether Boeing’s sixth-generation gamble pays off.