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Investing.com -- Shares of BAE Systems PLC (LON:BAES) fell 3% Wednesday following reports of an F-35 fighter jet crash during a training exercise in Alaska. The incident, which occurred at Eielson Air Force Base on Tuesday, resulted in significant damage to the aircraft, although the pilot safely ejected and was unharmed.
The crash, which happened while landing during a training session, involved an "in-flight malfunction," according to U.S. Air Force Colonel Paul Townsend. The pilot was subsequently taken to Bassett Army Hospital for evaluation.
BAE Systems, a key partner in the F-35 program, experienced a downturn in its stock as news of the crash circulated. The F-35 Lightning II is the most expensive U.S. defense program and is a major revenue source for Lockheed Martin (NYSE:LMT), contributing about 30% to the company’s bottom line. Lockheed Martin’s shares had already dropped 9% the previous day after announcing lower-than-expected profitability projections for 2025, partly due to delayed upgrades to the F-35. Shares of Lockheed Martin are flat in pre-open trading Wednesday.
The Pentagon’s commitment to the F-35 program remains substantial, with plans to spend $1.7 trillion, including the purchase of 2,500 planes over the coming decades. However, incidents like the recent crash can impact investor confidence in the companies involved.
Jefferies strategist Siddhartha Sandilya commented on the situation, stating, "Today, news of an F-35 crash in Alaska (pilot reported safe) weighs (on) BAE Systems, and could add to heaviness in LMT (-9% yesterday)." This sentiment reflects the immediate reaction of the market to the event, underscoring the potential implications for BAE Systems’ stock performance.
Investors are closely monitoring the situation as it develops, with the investigation into the crash likely to determine the longer-term impact on BAE Systems and its partners involved in the F-35 program.
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