The Boeing Company BA recently won a $45.8-million modification contract to procure P-8A aircrew training system production concurrency upgrades. The contract was awarded by the Naval Air Warfare Center Training Systems Division, Orlando, FL.
Majority of the work related to this deal will be performed in St. Louis, MI, and Jacksonville, FL. The contract will cater to the U.S. Navy and the government of Australia. The entire task is expected to be completed by December 2022.
Boeing’s P-8A is an aircraft designed for long-range anti-submarine warfare, anti-surface warfare, maritime surveillance and reconnaissance missions, capable of broad-area maritime and littoral operations. It is also effective at search and rescue missions.
What’s Favoring Boeing?
Being one of the major players in the defense business, Boeing stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog. During second-quarter 2019, its defense segment — Boeing Defense, Space & Security (BDS) — witnessed robust year-over-year top-line growth of 8% owing to increased weapons deliveries. We believe that the latest contract win along with the other notable ones in recent times will help the BDS segment to consistently deliver solid performances in the upcoming quarters.
Among other defense equipment, Boeing’s key forte particularly lies in the development of combat-proven aircraft such as the P-8A Poseidon. Notably, increasing demand for combat-proven jets like P-8A is fueling demand for the associated training system.
With increasing demand for realistic training that is concurrent and affordable, the P-8A training system gives pilots, aircrews and maintainers the most immersive environment at a fraction of the cost to train in a P-8A. These developments should support Boeing’s growth, considering the rising defense spending provisions made by the current U.S. administration.
Furthermore, the latest fiscal 2020 defense budget has allocated major war-fighting investments worth $57.7 billion for aircraft. The financial plan also included an investment plan of $1.5 billion for 6 P-8A Poseidon jets. Such proposed inclusions highlight the BDS segment’s solid growth prospects, which in turn, are likely to boost the company’s profit margin. more