Air Force Modernization: Programs, Budget, and Tensions

Air Force modernization is the service’s simultaneous effort to replace almost every major aircraft and weapon in its inventory — sixth-generation fighters, stealth bombers, autonomous drone wingmen, aerial tankers, jet trainers, intercontinental ballistic missiles, nuclear cruise missiles, and hypersonic weapons — under a fiscal 2027 budget request of $267.7 billion, while a shrinking, aging fleet, program delays, cost overruns, and congressional restrictions on retiring older aircraft make the whole undertaking harder than the topline number suggests.¹ Air Force leaders describe it as the largest modernization push in the service’s history.

Why the Push Is Happening Now

The Air Force fields fewer than half the fighters and bombers it had in 1991, and roughly two-thirds of its inventory is made up of aircraft types that first flew more than 50 years ago.² An October 2025 force structure report to Congress found the service needs 1,558 combat-coded fighters to execute the national defense strategy at low risk but has only about 1,271 — a shortfall of nearly 300 jets.³ The primary fighter fleet dropped below the legally mandated minimum of 1,145 aircraft in 2026 after a temporary congressional waiver expired.⁴

The service has repeatedly tried to retire legacy platforms to free money for new ones, and Congress has repeatedly refused. The FY2026 National Defense Authorization Act prohibits retiring A-10s below an inventory of 103, extends the RQ-4 Global Hawk retirement prohibition to 2030, restricts F-15E retirements, prohibits reductions to B-1 bomber squadrons, and bars cuts to the E-3 AWACS inventory.⁵ Air Force planners argue those restrictions strain maintenance resources and directly reduce fleet-wide readiness because money spent sustaining aircraft the service considers obsolete cannot be spent modernizing.³

The Money Behind the Effort

The FY2026 Air Force budget request totaled $209.6 billion, up 13.5% from the prior year. Research, development, test and evaluation accounted for $46.4 billion, procurement for $36.2 billion.⁶ The FY2027 request jumped to $267.7 billion, a 38% increase over FY2026 enacted levels.¹

Additional money arrived through the FY2025 reconciliation package signed on July 4, 2025, which delivered nearly $39 billion to the Air Force and Space Force. That legislation included $4.5 billion to accelerate B-21 bomber production, mandated additional F-15EX purchases, accelerated F-47 development, and funded munitions replenishment and Pacific training exercises.⁷

A separate Department of Government Efficiency review yielded what the service says amounts to $10.4 billion in cost reductions, mostly from contract terminations and renegotiations rather than cuts to major weapon systems. The single largest item was the termination of the DAFSTS consulting contract, which accounted for $4.8 billion in avoided costs.⁸ Defense Secretary Pete Hegseth said nuclear modernization, drone technology, and missile defense were explicitly protected from those redirections.⁹

The F-47 and the Next Generation of Fighters

The F-47 is the centerpiece of the Next Generation Air Dominance program and has been designated the world’s first sixth-generation fighter. Boeing won the engineering and manufacturing development contract in March 2025 after the program underwent a strategic pause in 2024 to mature critical technologies. The aircraft is intended to replace roughly 185 F-22 Raptors.¹⁰

Expected capabilities include a combat radius exceeding 1,000 nautical miles, speeds above Mach 2, and stealth performance surpassing the F-22. The Air Force is using a government-owned reference architecture for mission systems specifically to avoid the vendor lock-in that has slowed F-35 upgrades.¹¹ First flight is targeted for 2028, with operational availability not expected until the mid-2030s. The FY2027 budget requests $3 billion for continued development.¹

Collaborative Combat Aircraft

The Collaborative Combat Aircraft program is producing autonomous, jet-powered drones designed to fly alongside manned fighters, extending their reach and taking on missions like electronic warfare, targeting, and intelligence gathering. For Increment 1, Anduril is building the FQ-44 (“Fury”) and General Atomics the FQ-42 (“Dark Merlin”). The General Atomics prototype began flight testing by August 2025, and Anduril’s first flew in late October 2025. Both companies received production contracts in June 2026.¹² The General Atomics prototype crashed in April 2026 because of an autopilot software error, halting its flight testing for over a month.

The service aims to procure over 150 combat-capable CCAs by decade’s end, with eventual plans for roughly 1,000.¹³ Each CCA is projected to cost about one-third the price of a crewed fighter.¹⁴ Initial pairing is planned for F-22s and F-35s, with future integration under consideration for the F-47, F-15E, F-15EX, and F-16.³

The F-35: Backbone With Persistent Problems

The F-35 remains the numerical core of the fighter modernization plan, with roughly 500 in the current inventory and a program of record of 1,763 aircraft. But its Technology Refresh 3 hardware and Block 4 software upgrades have suffered years of delays and cost growth.

TR-3 delays caused a one-year halt in F-35 deliveries. When deliveries resumed in mid-2024, all 110 jets delivered that year arrived late by an average of 238 days, according to a Government Accountability Office report. Over 1,600 parts shortages were tied to TR-3 hardware as of February 2025.¹⁵ The Block 4 upgrade is now projected for completion no earlier than 2031 — at least six years behind the original timeline and at least $6 billion over its initial $10.6 billion budget.¹⁶ Total acquisition costs have reached over $485 billion, more than double the 2001 baseline, with lifetime sustainment estimated at $1.6 trillion.

Readiness is worse. The F-35’s overall mission-capable rate fell from 67% in fiscal 2021 to 44% in fiscal 2025. The full mission-capable rate — meaning the jet can perform all assigned missions — dropped from 38% to 25% over the same period. Air Force F-35As hit a 28.5% full mission-capable rate in fiscal 2025, far below the service’s 65% goal.¹⁷ The Joint Program Office launched a Global Support Solution Reset in 2025 that will require an estimated $13.7 billion in additional sustainment spending through fiscal 2031, with a goal of an 80% mission-capable rate by 2030.¹⁸

New Bombers: The B-21 Raider

The B-21 Raider, built by Northrop Grumman, is the Air Force’s new penetrating stealth bomber, with a program of record of at least 100 aircraft.¹⁹ It first flew in November 2023 and entered low-rate production in early 2024. A second test aircraft joined the flight-test campaign at Edwards Air Force Base in September 2025.²⁰

In February 2026, the Air Force and Northrop Grumman agreed to increase annual production capacity by 25%, funded through the $4.5 billion in the reconciliation legislation. The program remains on track to station aircraft at Ellsworth Air Force Base, South Dakota — its first main operating base — in 2027. Whiteman Air Force Base in Missouri and Dyess Air Force Base in Texas are also designated future operating locations. Cost per aircraft is currently about $700 million.²¹ The FY2027 budget requests $7 billion for the program.

Keeping the B-52 Flying Into the 2050s

While the B-21 comes online, the Air Force plans to keep its 76 B-52 bombers flying for decades by re-engining them with Rolls-Royce F130 turbofans, replacing 1960s-era Pratt & Whitney TF33s. The upgraded aircraft will be redesignated B-52Js. Boeing is the prime integrator, and the Commercial Engine Replacement Program passed its critical design review in 2026, about three years behind the original schedule after engine inlet distortion problems required a redesign.²²

Rolls-Royce completed altitude and operability testing of the F130 at the Arnold Engineering Development Complex in February 2026.²³ The first two B-52H aircraft will be converted at Boeing’s San Antonio facility, with the first arriving later in 2026. Ground and flight testing is expected in fiscal 2029, and initial operational capability is targeted for fiscal 2033. Program cost has risen to an estimated $9 billion, and Boeing received over $2 billion in December 2025 for integration and modification of test aircraft.²² The program also includes a radar upgrade and new generators for future capabilities.²⁴

Tankers and Trainers

The KC-46A Pegasus, built by Boeing, is the Air Force’s next-generation aerial refueling tanker, with over 100 in service globally and 168 on contract.²⁵ Since introduction the aircraft has had technical problems, most notably with its Remote Vision System, which operators use to guide the refueling boom. In May 2026 the Air Force and Boeing announced a plan to speed up retrofits of the redesigned RVS 2.0, cutting the installation timeline from 13 years to seven by bundling the upgrade with scheduled depot maintenance starting in early 2028. The approach is expected to reduce the impact on aircraft availability by 90%.²⁶ The same agreement includes a five-year performance-based logistics contract aimed at boosting overall KC-46 availability by more than 20% by 2030.

The T-7A Red Hawk, built by Boeing and Saab under a $9.2 billion contract awarded in 2018, is the Air Force’s replacement for the T-38 Talon jet trainer. The program reached Milestone C in April 2026, clearing it for low-rate initial production under a $219 million contract for the first 14 aircraft.²⁷ The first T-7A arrived at Joint Base San Antonio-Randolph in December 2025, with initial operational capability targeted for 2027. The program is significantly delayed — operational aircraft were originally planned for 2023 — because of ejection seat deficiencies, flight control software problems, and supply chain issues. Boeing’s losses on the fixed-price development contract have exceeded $1.8 billion.²⁸ Budget plans call for 23 aircraft in fiscal 2027, 36 in 2028, and 42 in 2029, building toward 351 jets and 46 simulators at five training bases over the next decade.²⁹

Nuclear Modernization

The Air Force owns two legs of the nuclear triad — land-based intercontinental ballistic missiles and air-delivered nuclear weapons — and both are being replaced.

Sentinel ICBM

The LGM-35A Sentinel, meant to replace the Minuteman III, is the most troubled major program in the modernization portfolio. In 2024 it triggered a Nunn-McCurdy breach when its estimated cost grew 81%, driven partly by the discovery that existing Minuteman III silos could not be reused as planned. The cost estimate rose to at least $141 billion, with the final figure still uncertain.³⁰ The breach forced the Under Secretary of Defense to rescind Milestone B approval, and the program is being restructured, with new approval targeted for the end of 2026.³¹

First flight test has slipped roughly four years to March 2028, and initial delivery of operational missiles is now expected in the early 2030s. The GAO has warned that software development is behind schedule and that the Minuteman III will now need to remain in service through 2050, 14 years longer than originally planned, creating additional sustainment risk for a weapon that entered service in the 1970s.³⁰

Long-Range Standoff Weapon

The AGM-181 Long-Range Standoff Weapon, developed by Raytheon, will replace the AGM-86B Air-Launched Cruise Missile in service since the 1980s. The program passed its critical design review in 2023 and is in developmental testing, with the Air Force reporting that all technical performance requirements are being met.³² A low-rate production decision is scheduled for February 2027, with full-rate production planned for mid-2029. The missile is intended to enter service on the B-52 around 2030 carrying a W80-4 warhead with a selectable yield of up to 150 kilotons. The Air Force plans to acquire 1,087 missiles at an estimated unit cost of $14 million, with funding jumping from $295.5 million in fiscal 2026 to $1.22 billion in fiscal 2027.³³

Hypersonics and Long-Range Munitions

The Hypersonic Attack Cruise Missile, developed by Raytheon with a Northrop Grumman scramjet, is designed to reach speeds approaching Mach 8 with an estimated range of about 1,000 nautical miles. Flight testing was delayed by a year, but prototype tests began in fiscal 2026, and the Air Force has requested $404 million in the FY2027 budget to begin the first production lot, with cumulative procurement funding projected at more than $3 billion through fiscal 2031.³⁴ Because procurement is starting before the full validation cycle is complete, the program is relying on a reduced flight-test campaign of roughly five tests plus heavy use of modeling and simulation. Initial integration is on the F-15E, with future compatibility planned for the F-35A and other platforms.³⁵

The FY2027 budget also includes $600 million for “affordable mass munitions,” part of a broader shift toward long-range weapons that can be produced in large numbers and replenished quickly.¹

Battle Management, AWACS Replacement, and Electronic Warfare

The E-7A Wedgetail, meant to replace the 1970s-era E-3 Sentry AWACS, has had a turbulent path. The Air Force originally contracted with Boeing for two prototypes under a $2.6 billion deal, planning 26 aircraft in total. When development costs grew to $3.6 billion and operational capability slipped to 2032, the service moved to cancel the program in its fiscal 2026 budget.³⁶ Congress reversed course, appropriating over $1 billion for the E-7 in the FY2026 defense bill and prohibiting the Air Force from terminating the contract or shutting down the production line.⁵ After an E-3 Sentry was destroyed in an Iranian attack in March 2026, Secretary Hegseth said in May that the Pentagon’s “mindset” on the E-7 had changed, and five additional aircraft were placed under contract. The Pentagon is now working to add E-7 funding to the FY2027 request.³⁷

On the electronic warfare side, the Air Force is moving away from a model where EW capabilities are embedded in individual aircraft and toward a “system of systems” approach that integrates sensors, jammers, and cyber tools across platforms and domains. The service established the Integrated Capabilities Command to drive requirements and an Integrated Capabilities Office to streamline acquisition.³⁸ The EA-37B Compass Call is the primary modernized electronic attack asset, though the service acknowledges it needs more than the current budget supports. CCAs are also being considered for electronic attack roles.³⁹

For command and control, the Air Force achieved initial operational capability in October 2023 for Cloud-Based Command and Control, which fuses data from hundreds of sources into a common interface. The service is also advancing the Advanced Battle Management System as its contribution to the Pentagon’s Combined Joint All-Domain Command and Control initiative.³⁹

Agile Combat Employment

Modernization is also a change in how the force operates. Agile Combat Employment moves the service away from reliance on a small number of large, fixed bases vulnerable to long-range missile attack and toward a dispersed network of locations where small teams can generate sorties, refuel, rearm, and rapidly move. The concept is driven mainly by China’s growing arsenal of ballistic missiles and its expanding intelligence, surveillance, and reconnaissance satellites.

Since 2020, the Air Force has conducted roughly 45 exercises with an ACE training component in the Indo-Pacific alone, using over 35 different airfields.⁴⁰ The largest, REFORPAC 2025, involved over 12,000 personnel and 400 aircraft across more than 50 locations spanning a 6,000-by-4,000-mile area.⁴¹ The FY2024 Pacific Deterrence Initiative authorized $917 million for regional logistics, maintenance, and pre-positioning improvements, and infrastructure work continues at locations like Tinian North Field in the Mariana Islands, announced in May 2025 as a semi-permanent contingency location. The existing logistics command-and-control architecture still relies on fragmented legacy systems and manual data entry, and there are few hardened aircraft shelters anywhere in the Pacific.

The Central Tension

The recurring theme across nearly every program is the tension between maintaining today’s force and building tomorrow’s. Weapon system sustainment is funded at about 80% of requirements, and a $400 million annual shortfall in fighter maintenance persists.³ The service’s own planners have said it is “hollowing out the force” by trying to sustain legacy aircraft and modernize at the same time without sufficient funding for either.⁴² Programs like F-35 Block 4, Sentinel, and the B-52 re-engining are years behind schedule and billions over budget, consuming money that was supposed to fund the next generation of systems.

The fleet size is still declining, with the service divesting more aircraft each year than it acquires. The near-term plan is to reach 1,369 fighters by early 2030 on the way to the 1,558-aircraft goal, a timeline that depends on ramping F-35A procurement to 100 jets per year and F-15EX production to 24 per year, along with fielding enough CCAs to reduce the demand for manned aircraft.⁴³ The service’s own October 2025 report called that path an “aspirational plan” that would require a significant budget increase to achieve.

1
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2
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3
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U.S. Air Force. Air Force Awards Contract for Next Generation Air Dominance Platform F-47
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Air & Space Forces Magazine. F-47 Not Available Until Mid-2030s
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Defense One. Anduril, General Atomics Get Air Force Contracts to Build First Drone Wingmen
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U.S. Air Force. Air Force Advances Future of Air Superiority With CCA Contracts
14
Congressional Research Service. Collaborative Combat Aircraft
15
Defense News. Pentagon Cuts Back F-35 Upgrades to Slow Schedule Slips
16
Breaking Defense. F-35 Block 4 Upgrade Delayed Until at Least 2031
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Air & Space Forces Magazine. GAO: One in Four F-35s Can Fly All Missions
18
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21
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22
The War Zone. First B-52 to Arrive for Re-Engining at Boeing Plant Later This Year
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25
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U.S. Air Force. Air Force, Boeing Accelerate KC-46 Upgrades to Target Readiness
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U.S. Air Force. Air Force Greenlights T-7A Red Hawk for Production
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Air Force Times. Air Force Clears T-7A Red Hawk for Low-Rate Production
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Air & Space Forces Magazine. T-7 Red Hawk Production, Boeing Contract
30
GAO. LGM-35A Sentinel Program Status
31
Defense One. Cost Estimate for New Sentinel ICBM Plan Won’t Arrive Until Year’s End
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Air Force Nuclear Weapons Center. Long Range Standoff Weapon
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Air & Space Forces Magazine. Air Force Reveals First Image of LRSO Nuclear Cruise Missile
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Army Recognition. US Air Force Requests $404 Million to Produce First HACM Hypersonic Missiles
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Air & Space Forces Magazine. HACM Flight Tests Delayed by a Year
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Air & Space Forces Magazine. Air Force Plans to Cancel E-7 Wedgetail Buy
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The War Zone. Pentagon’s Mindset on E-7 Radar Aircraft Has Completely Changed
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DefenseScoop. Air Force Moves to Disaggregate Electronic Warfare Capabilities From Platforms
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AFCEA Signal. Department of the Air Force Targets Key Cross-Cutting Solutions
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IISS. Shuffling the Deck: Realising ACE in the Indo-Pacific
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Defense Logistics Agency. REFORPAC 2025 and the Friction of Distribution
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Air & Space Forces Magazine. Air Force Fleet Size Shrinking, Top Planner Says
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Defense News. US Air Force Wants 1,558 Fighters — Can It Get There?