Commission reallocates returned Lufthansa funds to expand Kratos engine test‑cell in Bristow

The commission on March 11 approved an amendment reallocating state engine test‑cell dollars to Kratos’s Bristow engine manufacturing project after Lufthansa declined a prior allocation.

Director Grayson Artis told commissioners the Legislature originally provided an allocation for engine test cells in FY24 that included funds for a Lufthansa project. Lufthansa subsequently declined about $16 million that had been reserved for that project; staff worked with multiple in‑state engine test‑cell proposals and recommended increasing the state share for Kratos’s new engine manufacturing line in Bristow.

Artis said the agency will provide roughly 60% of the cost for Kratos’s new engine test cell at Bristow — about $2.3 million — with Kratos responsible for the remaining 40% in cash. “We have the money available. It's sitting in the account from that FY24 appropriation that was originally allocated to Lufthansa,” Artis said. The commission approved the amendment by roll call.

Why it matters: The allocation repurposes previously unused state funds to support in‑state aerospace manufacturing and testing capacity. Artis described the Kratos project as linked to both MRO (maintenance/repair/overhaul) and new engine manufacturing work in Bristow.

Details and limits: Staff did not provide an engine model name on the record and said multiple engine types will be tested; some engines will be reusable and others single‑use for unmanned systems. The motion authorized the grant amendment; additional contractual and procurement steps likely follow to finalize funding disbursement.

Next steps: Staff will complete grant documents and oversee Kratos’s compliance with the 60/40 funding split and grant terms.