BOEING CASHES IN. Boeing’s Big Day. “..attributed the company’s win to its experience with Navy aircraft” By Todd Horwitz, Bubba Trading

 

Chicago-based Boeing has been awarded an $805 million contract to develop the Navy’s MQ-25A unmanned aerial refueling drone, the Navy announced Thursday, handing the company’s Arlington-based defense business a much-needed win.

Bethesda, Md.-based Lockheed Martin and San Diego-based General Atomics had also vied for the opportunity. Under the terms of the contract, Boeing is to produce four of the unmanned aircraft by 2024, the first major step in a defense program that is expected to eventually exceed $7 billion.

Boeing’s defense, space and security president and chief executive Leanne Caret attributed the company’s win to its experience with Navy aircraft and close understanding of the service’s needs. Boeing hasn’t won a big, new Pentagon program in a competition since securing a deal in 2011 to build aerial tankers for the Air Force. It was the sole bidder to build the jets that will fly as the future Air Force One.

The Stingray was originally conceived to carry weapons as well as provide refueling capabilities, with later plans also envisaging its use for reconnaissance. The Navy then changed tack in a bid to speed development and keep costs down, focusing on the drones’ use for refueling. Carrier-based aircraft are currently refueled with Boeing F/A-18 combat jets. The first Stingray is expected to fly in 2021, entering service three years later.

Northrop Grumman Corp, which developed a prototype that successfully landed and took off from an aircraft carrier, elected not to bid for the MQ-25A contract. Boeing is competing with Northrop to replace the U.S. arsenal of land-based nuclear missiles, and with Lockheed and Leonardo Spa to build new trainer jets for the U.S. Air Force.

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.