Northrop looks to pursue new USAF combat drone programs

Northrop Grumman is aiming to go after two forthcoming classified drone efforts the Air Force plans to include in its fiscal year 2023 budget request, with the company's chief executive saying today that executives "see those as opportunities that we will pursue."

While little is publicly known about the new programs to pair unmanned aerial vehicles with fighters and bombers -- undertakings that service Secretary Frank Kendall unveiled in December -- Northrop CEO Kathy Warden told analysts during an earnings call that “there’s starting to be some more meat on the bones as to what those specific opportunities will be.”

The programs come during what Warden described as a period of transition for the military aircraft market, “as our customers focus their investments in next-generation programs while divesting from legacy platforms.” That includes the phasing out of the company’s RQ-4 Global Hawk unmanned surveillance platforms.

Still, Warden noted the unmanned systems realm is “continuing to evolve,” adding: “We do see the market as continuing to be attractive.”

Beyond Northrop, executives from Boeing, General Atomics and Kratos -- all of which are involved in the Air Force’s autonomous aircraft teaming endeavor called Skyborg -- have welcomed the service’s plans.

Meanwhile, Northrop’s aeronautics business saw $2.6 billion in sales over the final quarter of 2021, a 25% drop compared to the same three-month period in 2020. The sector manufactures the center fuselage for the F-35 and is where, Chief Financial Officer Dave Keffer said today, company executives saw the “most significant” COVID-19-related effects on labor availability and supply chain.

Warden said the labor issues have “an impact particularly in our high-rate, high-volume production lines, where people are in closer proximity and where whole work cells might be impacted if we have one person sick or out.” In the aeronautics sector, she said, there’s “really only one” of those programs: the F-35.

Going forward, Warden said she expects continued challenges in 2022 that’ll “dissipate” entering 2023, with “that trend reversing in the 2024 timeframe.”

“We don’t expect these same levels of decline as we move into next year,” she added.