The U.S. Air Force’s $16 billion competition for a modern training aircraft to replace the vintage Northrop T-38 Talon has come down to a cost shoot-out between Boeing and Lockheed Martin, following the exit of Raytheon and Northrop Grumman. Raytheon was first to quit, declaring its withdrawal from the T-X contest on Jan. 25 after failing to agree to terms with Italy’s Leonardo on the unit cost of the M-346 Master—which they would have pitched as the T-100, to undergo ...

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