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The Boeing Company BA recently secured a contract for the delivery of spare parts for the F/A-18 aircraft. Valued at $217 million, the deal was awarded by the Defense Logistics Agency Aviation, Philadelphia, PA.
Work related to the deal will be carried out in the state of Missouri and is expected to get complete by Dec 30, 2022.
Rising Demand of F/A-18
Boeing’s Super Hornet F/A-18 aircraft is consistently evolving to outpace future threats. In fact, its radar, mission computers and sensors are continuously being upgraded in order to meet extensive mission profiles. Due to the ever rising worldwide demand of military aircraft, Boeing also developed the Advanced Block III Super Hornet for complementing existing and future air-wing capabilities, which includes battle-space situational awareness, counter stealth targeting, increased acceleration and improved survivability.
Such major developments enabled Boeing to witness solid demand for its fighter aircraft and major aerospace programs including the F-18 aircraft. This is evident from an $862-million contract the company secured in second-quarter 2018 along with other similar contracts for providing full-rate production of 42 F/A-18E and three F/A-18F aircraft for the U.S Navy. Going forward, we believe the recent contract win will also enable Boeing in fortifying its jet fighters’ position in the global market.
What’s Favoring Boeing?
As Boeing’s key forte lies in manufacturing combat-proven aircraft, it has inevitably secured large number of contracts from the Pentagon for long, courtesy of its proven expertise in aerospace programs. Subsequently, revenues of its Defense, Space & Security (BDS) segment witnessed a 9% year-over-year rise to $5.59 billion in second-quarter 2018.
Further, in July, Boeing entered into an agreement to acquire KLX Inc., a major independent provider of aviation parts and services in the aerospace industry. The acquisition, once completed, will certainly help Boeing enhance its global parts distribution and supply-chain services.
Also, in July, the U.S. Senate approved the fiscal 2019 defense budget, which provisions for major war fighting investments worth $21.7 billion for aircraft. Such proposed inclusions reflect solid growth prospects for the company’s BDS segment, which, in turn, are likely to boost the its profit margin.
Price Movement
Boeing’s stock gained 47% in the last year compared with its industry’s growth of 23.2%. The outperformance was primarily led by the robust worldwide demand for its commercial aircraft and military jets.