Bell-Boeing JV Wins Deal To Support V-22 Flight Test Analysis
Zacks Investment Research | Jan 01, 2020 09:41PM ET
Bell-Boeing, a joint venture (JV) between The Boeing Company (NYSE:BA) and Textron Inc.’s (NYSE:TXT) Bell Helicopter unit, recently secured a modification contract to offer on-site support, engineering and technical analysis of flight test for V-22 aircraft. Work related to the deal is scheduled to be completed by December 2020.
Valued at $23.3 million, the contract was awarded by the Naval Air Systems Command, Patuxent River, MD. The deal will serve the U.S. Navy, Air Force and the government of Japan. Majority of the work related to the deal will be carried out in Patuxent River, MD, and Fort Worth, TX.
Attributes of V-22 Jets
Bell-Boeing’s primary product, V-22 Osprey, is a family of multi-mission, tiltrotor military aircraft, with both vertical as well as short takeoff and landing capabilities. It is designed to combine the functionality of a conventional helicopter, with long-range, high-speed cruise performance of a turboprop aircraft. This military aircraft can carry 24 combat troops or up to 20,000 pounds of internal cargo or 15,000 pounds of external cargo.
Apart from its wide usage domestically, this family of tiltrotors has been deployed in numerous missions overseas, including casualty evacuations, tactical recovery of aircraft and personnel, humanitarian assistance/disaster relief, resupply, VIP transport and theater security cooperation. Notably, MV-22 and CV-22 are two variants of the V-22 family of jets.
Our View
Increasing terrorist attacks globally and the rising threat from ISIS have compelled nations to strengthen their defense arsenal and bump up the budget for the same in recent times. The present U.S. administration is also in favor of raising defense spending in contrast to the budget sequestration enacted by the prior government.
The U.S. fiscal 2019 defense budget worth $718 billion further supports this fact. Notably, this budget includes a spending plan of $57.7 billion on aircraft, reflecting a massive surge of 166% from the approved fiscal 2019 aircraft spending.
Considering such a bountiful spending provision, defense majors like Boeing and Textron are witnessing increased flow of contracts from the Pentagon for their high-end defense products. The latest contract win by Bell-Boeing mirrors the same.
Looking Ahead
Per a Frost and Sullivan report, the global combat aircraft market is expected to see a CAGR of 0.3% to $47.2 billion by 2026 from 2017. Such growth can be attributed to the rise in global threats, geopolitical instabilities and increased defense spending. These projections should continue to boost demand for V-22 jets, which in turn is expected to further bolster the performance of these two defense contractors and drive their respective profit margins in the near term.
Price Performance
In a year’s time, shares of Boeing have gained about 7.2% compared with theZacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.