The Boeing Company
) has been awarded a contract worth $368 million by the Electronic
Systems Center of the U.S. Air Force to provide engineering,
manufacturing and development ("EMD") assistance to U.S. Air Force
and NATO. This agreement constitutes the second phase of a
cooperative program between NATO and the U.S. Air Force.
Per the agreement, Boeing will amalgamate new and existing
avionics and communications systems, create a design for
installation of the new equipment and upgrade an aircraft for each
Airborne Warning and Control System ("AWACS") fleet. The company
will also train flight crew and maintenance support staff of the
The AWACS was initiated in 1977 and used by the U.S. Air Force
and NATO. This Boeing 707-320B and the E-3 airframe based system
command and control, and surveillance and communications activities
for strategic and defensive missions.
Boeing has already completed initial formalities including
subsystem requirements reviews. While installation on the NATO
AWACS aircrafts are expected to start from the third quarter of
2013, modernization activities are scheduled to begin in 2014. Both
the processes are expected to conclude by 2015.
The digital flight deck will comprise five main glass displays,
thus providing pilots and co-pilots with comprehensive and
customized engine, navigation and radar information. The transition
from analog to digital systems will enable the U.S. Air Force and
NATO fleet to comply with air traffic management requirements for
flying and also reduce cost of operations due to a decline in crew
members from four to three.
Apart from Boeing,
Rockwell Collins, Inc.
) will provide glass displays and air-data and flight-management
computers. The company will also get support from
) and Thales SA.
Prior to this contract, Boeing was awarded a contract worth $324
million by the Electronics Systems Center at Hanscom Air Force
Base, Massachusetts to improve France's fleet of four E-3F AWACS
aircrafts and its ground system.
Boeing has a strong product portfolio, well positioned to take
advantage of the focus on the defense and security division with
improving financial results. In first quarter 2012, the Defense,
Space & Security segment contributed revenue of $8.2 billion
compared with $7.6 billion in the year-ago quarter. This was driven
by higher sales of Boeing military aircrafts and global services
But, we are concerned about proposed cutbacks in the U.S.
defense budget and risks related to project executions and order
Boeing currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating.
Headquartered in Chicago, The Boeing Company is a premier jet
aircraft manufacturer and one of the largest defense contractors in
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