GE Aerospace Teams Up With Kratos To Develop Engines For Next-Gen UAVs And CCA-Type Aircraft

Under the new agreement, the companies will jointly develop, manufacture, and test the GEK800 engine and begin work on a second engine, the GEK1500.

Kratos Defense & Security Solutions (KTOS) and GE Aerospace (GE) announced Tuesday they have signed a formal teaming agreement to co-develop propulsion technologies for the next generation of affordable unmanned aerial systems (UAVs) and Collaborative Combat Aircraft (CCA)-type platforms.

CCA-type aircraft are a new class of advanced, autonomous or semi-autonomous uncrewed systems designed to operate alongside traditional manned fighter jets and other military aircraft. 

Their core purpose is to create a networked combat system that leverages artificial intelligence, advanced sensors, and secure communications.

The deal builds on a 2023 memorandum of understanding between the companies focused on small, cost-efficient jet engines for expendable military aircraft. 

Under the new agreement, the companies will jointly develop, manufacture, and test the GEK800 engine and begin work on a second engine, the GEK1500. 

Both platforms are intended for U.S. Department of Defense programs requiring scalable propulsion solutions for unmanned and autonomous aircraft.

Kratos Defense’s stock rose as much as 1.5% in pre-market trade on Tuesday, while GE Aerospace’s stock edged 0.20% lower. 

“This teaming agreement and the development of these new engines mark another step forward in our dedication to providing affordable, adaptable, high-performance propulsion systems for the future force,” said Amy Gowder, President and CEO of Defense & Systems at GE Aerospace.

Kratos CEO Eric DeMarco said the GEK engine family is targeting "certain of the most important, mission-critical, and highest priority needs and requirements of United States National Security."

The propulsion systems under development are expected to support a broad range of defense platforms, including UAVs, CCA-type aircraft, and other mass-deployable systems aligned with U.S. military modernization strategies.

RBC Capital also raised its price target on GE Aerospace on Tuesday to $275 from $220, maintaining an ‘Outperform’ rating. The brokerage sees the stock as a key play on the aerospace cycle and expects more upside, especially if management boosts its 2025 outlook at the Paris Airshow, scheduled for June 16.

Kratos stock is up nearly 45% year-to-date and more than 70% over the past 12 months. GE Aerospace has gained 47% this year and 48% over the past 12 months.

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