By Mike Stone

WASHINGTON (Reuters) -The U.S. Navy will eliminate defense giant Lockheed Martin Corp from the competition to build its next-generation carrier-based stealth fighter – a key part of plans to confront China on its home turf, people familiar with the decision said.

The Navy will move ahead with designs from Boeing Co and Northrop Grumman Corp while eliminating Lockheed Martin from the next-generation fighter jet competition, dubbed the F/A-XX. The new jet will replace the Navy’s F/A-18E/F Super Hornet fleet, which has been in service since the 1990s.

Lockheed Martin referred Reuters to the Navy for a comment. The Navy did not immediately respond to the request for comment.

The two sources close to the program said Lockheed Martin had not met the necessary criteria to move forward in the competition.

One of the sources said the Navy appeared to be holding off on announcing a decision on the program until there was a confirmed Secretary of the Navy. John Phelan, President Donald Trump’s pick to be the Secretary of the Navy, had a Congressional hearing on February 27. No confirmation vote is publicly scheduled.A contract for Engineering and Manufacturing Development will be awarded to the two remaining competitors. After the Pentagon evaluates their designs, a single contractor will be selected for the jet, which is expected to enter service in the next decade.

The U.S. Air Force is also working on a sixth-generation jet fighter but in late 2024 paused its effort to address cost concerns and rethink its requirements.

Although the Pentagon did not mention China in putting the program on hold, photos and videos emerged in January of two new Chinese aircraft – both radical tailless designs that could be next-generation technology.

The Navy’s moving forward with its sixth-generation fighter would deliver the Trump administration a potential showpiece in standing against Chinese regional ambitions – although some in the administration, and billionaire adviser Elon Musk, have derided advanced fighters as a waste of money.

The quantity of jets, the value and exact timelines of the program remain classified, but previous such contracts – such as that for the F-35 – have been worth tens of billions of dollars over their lifetime.

The U.S. Navy still plans to buy more than 270 F-35C jets for its carrier fleet.

The F/A-XX is expected to feature advanced stealth capabilities, improved range and endurance, and the ability to integrate with both uncrewed combat aircraft and the Navy’s carrier-based air defense systems.

Breaking Defense earlier reported on Lockheed’s departure.

(Reporting by Mike Stone; Editing by Leslie Adler and Stephen Coates)

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