Boeing (BA) Wins Army Deal to Support CH-47 Chinook Program
The Boeing Company BA recently secured a contract to conduct inspection and overhaul of the CH-47 Chinook mechanical transmission.
Valued at $49.7 million, the contract was awarded by the Army Contracting Command, Redstone Arsenal, AL. The entire task is expected to be completed by August 2025.
Importance of CH-47 Chinook
In recent times, military rotorcrafts like the Chinook are being used in line with the comprehensive mission parameters, thanks to the integration of advanced and multiple capabilities instilled in them. Not only the U.S. Army but this heavy-lift helicopter is also being deployed by major militaries across the globe, courtesy of its combat-proven expertise to perform complex and tactical missions, which include air transportation of troops, weapons, and internal and external cargo. Its growth on a global scale is evident as militaries of nations such as the United Kingdom, The Netherlands, Spain, Australia, Japan, South Korea, the United Arab Emirates and others use this multi-mission aircraft.
The fact that more than 950 Chinooks are currently in service in 20 countries surely reflects the solid demand enjoyed by this helicopter, with the aforementioned contract being a bright example of the same.
Growth Prospects
A rapid increase in terror attacks has compelled nations to strengthen their arsenal and bump up defense budget. With the United States being home to some of the largest manufacturers of combat jets, the nation’s prime defense contractors enjoy a steady flow of contracts from both Pentagon and its foreign allies. With military jets and helicopters constituting a major portion of a nation’s armaments, there is a steady flow of contracts for these weaponries. The latest contract win by Boeing bears a testament to this.
Per a report by the Mordor Intelligence firm, the global military rotorcraft market is expected to witness a CAGR of 3% during the 2020-2025 period.
Such projections bode well for combat helicopter-makers such as Airbus SE EADSY, Lockheed Martin LMT and Textron TXT as well as Boeing.
Price Movement
Shares of Boeing have gained 23.1% in the past year against the industry’s decline of 4.8%.
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Zacks Rank
Boeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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