Boeing Wins $565M FMS Deal To Remanufacture AH-64E Aircraft
Zacks Investment Research | Dec 18, 2019 09:27PM ET
The Boeing Company (NYSE:BA) recently secured a $564.5-million contract under the Foreign Military Sales program to remanufacture Apache (NYSE:APA) AH-64E aircraft. Boeing will remanufacture the combat helicopter for the militaries of the Netherlands, the UAE and the U.K.
The contract was awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL. Work related to the deal will be performed in Mesa, AZ, and is expected to get completed by Mar 1, 2025.
Growing Importance of Apache AH-64E Helicopters
Boeing’s AH-64 Apache has already emerged as the world’s most advanced multi-role combat helicopter that is used by the U.S. Army and a growing number of international defense forces. In July, the U.S. Army revealed its plans of granting the company a multiyear contract to remanufacture up to 600 Apache AH-64E helicopters, although no value was disclosed with the news.
Technological Additions to Boost Demand
In February 2018, the U.S. Army decided to halt the delivery of AH-64E attack helicopters as a strap pack nut on the main rotor was corroding in coastal environments. Hence, the company planned on making new additions to improve performance and safety measures. The new Apache helicopters would have a cognitive decision aiding system, updated Longbow radar and new self-diagnostic abilities. Extended-range fuel tanks may also be included to further increase its range and endurance. Additionally, new and advanced composite rotor blades will improve safety
measures.
Therefore, the remanufactured helicopters would be highly advanced and lethal, which in turn is sure to boost their demand.
Boeing’s Growing Prospects in Netherlands, UAE & UK
Boeing’s AH-64 Apache has widely been accepted by several militaries across the world. This is evident as the company secured major orders for this product from the Netherlands, the UAE and the U.K., earlier this year.
In August, Boeing secured a $145.9-million contract for the Netherland’s Longbow Crew Trainers. In September 2018, the nation signed a letter of offer and acceptance worth $1.2 billion for upgrading the Dutch fleet of AH-64D Apache helicopters. In July, the company was awarded a $96.9-million contract to provide support to the Apache helicopters and Longbow crew trainers in the UAE.
Moreover, the U.K. currently operates a modified version of Boeing’s Apache Longbow Crew Trainers. The latest contract will be pivotal for the company in strengthening existing relations and capturing a larger portion of the military helicopter market.
Notably, such order growth is expected to provide Boeing with enormous opportunities to expand in these nations, thereby bolstering its international sales.
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