Financial analysts said Wednesday that they expect Northrop to lose in its bid to sell its F-20 jet fighter to the Air Force but to win a prime contract on the much more important Advanced Tactical Fighter (ATF) program.
The Air Force confirmed Wednesday that Air Force Secretary Edward C. Aldridge will announce the award of the two major aircraft contracts on Friday in Los Angeles.
The Air Force has been weighing bids by Northrop and General Dynamics for 270 air defense fighters, worth as much as $4 billion in business. General Dynamics offered versions of its F-16 and Northrop offered its F-20.
The other contract involves the Air Force's plans to buy 750 ATFs as its principal "air superiority" fighter of the future. The massive program will be worth more than $40 billion and will ensure the winner a lucrative place in the future of the aircraft industry.
Northrop and McDonnell Douglas have formed one team to pursue the ATF contract. Lockheed, Boeing and General Dynamics have formed a second team. Rockwell International and Grumman, which also are bidding for the ATF, have not announced participation on any teams.
Gregory H. Kieselmann, senior vice president and aerospace analyst at Morgan, Olmstead, Kennedy & Gardner, said well-placed sources in the aerospace industry have indicated to him that Northrop will fail in its F-20 bid.
But, if that occurs, the loss would be more than offset by receipt of a prime contract to develop prototypes of the ATF.
"That's what we expect and that's what we are advising our clients," Kieselmann said.
Paul Nisbet, an aerospace analyst at Prudential-Bache Securities, said he also expects Northrop to lose the F-20 competition. He put the odds at 55% that General Dynamics will win that contract to provide the Air Force with the 270 air defense fighters.
On the ATF program, however, Nisbet said Northrop is no more likely to win one of the two prime contracts to be awarded than several of the other leading contenders.
"There will be a heavy emphasis on companies with stealth (radar-avoiding) technology, but the Air Force won't put all of its eggs in the stealth basket," Nisbet said. "I think they will choose one company known for its stealth capabilities and one company known for conventional capabilities."
Generally, Northrop and Lockheed are considered the nation's top stealth technology contractors, while McDonnell Douglas and General Dynamics are considered the leading builders of conventional fighter planes.
Rockwell officials, however, have said in recent interviews that they feel confident that their ATF proposal will be recognized as the superior design.
Grumman, principally a Navy jet builder, is widely regarded as unlikely to win.