Northrop sold company-owned B-21 test aircraft to USAF for $371m

The transfer was previously disclosed without a specific dollar value.

Defence manufacturer Northrop Grumman has revealed how much the US Air Force paid for a company-owned B-21 test article.

Northrop confirmed the sale of that aircraft in April but did not disclose the price. Several months later, the company has revealed that it received $371 million from the air force for the stealth bomber prototype.

That aircraft is distinct from the two flying prototypes that Northrop has already delivered to the USAF, which are supporting the service’s B-21 test and evaluation campaign at Edwards AFB.

Chief financial officer John Greene confirmed the price on 20 October during Northrop’s third-quarter earnings call, saying the company received “$371 million of proceeds from the sale of a test asset on the B-21 programme”, during the period covering July, August and September.

It was also Greene who initially revealed the test asset sale during a similar earnings call in April.

“To support the acceleration of aircraft deliveries, we agreed to sell an aircraft to the air force that was previously planned to be utilised as a company-owned test asset,” he said at the time.

Financial disclosures filed around the time of the sale suggest the transfer of the company-owned test aircraft was agreed to as part of a $4.5 billion deal between Northrop and the USAF announced in February aimed at accelerating B-21 production.

Those filings also reveal that the company-owned test aircraft was under construction at the time of the sale. The deal did not impact existing plans for low-rate initial production (LRIP) of the bomber, at least 21 of which have been agreed to across five production lots.

Losses from B-21 development

Northrop has absorbed significant financial losses on the LRIP phase of the B-21 programme, which comes with higher costs and lower margins than full-rate production, sustainment and modernisation stages. The company has already incurred losses in excess of $1 billion, according to financial disclosures, with that number ultimately expected to reach $2 billion across B-21 LRIP.

Despite those challenges, chief executive Kathy Warden says the programme is performing well, with test aircraft meeting key performance parameters set by the USAF. That gives Warden confidence that Northrop will avoid what she describes as the largest risk in a new development programme.

“Which is that you would find discoveries late,” she says. “We are knocking down that risk with each progressing day and test milestone that is successful.

“It is not without risk because we still have a ways to go, clearly, in production of our remaining LRIP units,” she adds. But our confidence continues to grow in the team’s ability to execute on that programme.”

Production build-out

Northrop is also continuing to invest heavily in capital expenditures related to B-21 production. Earlier this month, the company broke ground on what will become the final assembly line for the new stealth bomber at the USAF’s Plant 42 secure manufacturing site in Palmdale, California.

“In total, we expect approximately $2.1 billion in 2027 capex, with a large chunk of that going to supporting B-21 production capacity,” Greene says.

A 10-Q financial disclosure filed in March indicates Northrop will spend around $2.5 billion over multiple years on building out B-21 production capacity. Part of that work is being supported by the February deal with the Pentagon to accelerate delivery of the new bomber fleet.

“We will be investing in that acceleration capacity over the next couple of years and then expect to see the translation into higher volumes later in the decade,” Warden says.

Northrop is preparing to deliver the first combat-configured B-21 stealth bombers in 2027, which the USAF says will initially be stationed at Ellsworth AFB in South Dakota. Washington plans to field at least 100 B-21s, a fleet which will be spread across the air force’s bomber hubs of Ellsworth, Dyess AFB in Texas, and Whiteman AFB in Missouri.

The USAF has imposed strict price targets for the B-21, stipulating an average cost of $692 million per aircraft in 2022 values, adjusted from the original 2010-valued target of $550 million per bomber.

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