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Boeing Wins Contract for Apache and Chinook from India

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The U.S. government and India recently signed a deal involving the purchase of Boeing Co. 's BA 22 Apache attack helicopters and 15 CH-47F Chinook multi-mission heavy-lift helicopters for the Indian Air Force ("IAF").

The contract is worth around $3 billion. The first delivery is expected in Sep 2018 while the complete order should be delivered by Mar 2020. The deal also includes the option for follow-on orders of another 11 Apaches and 7 Chinooks.

For Chinook helicopters, Indian officials signed contract directly with the aerospace giant involving the direct commercial sale ("DCS") of the complete Chinook helicopter, along with logistic support, spares and services.

Now for Apache, a part of the deal was signed with Boeing and the other with the U.S. government, under an Foreign Military Sales or FMS program.

The contract also includes weapons, training, aircraft certification, and components like engines, electro-optical sensors and radars.

Both the models will be delivered in a fully-built, ready-for-operations condition.

The Apache helicopters are one of the most advanced, multi-role combat helicopters. Boeing's Apache, with a cruising speed of 284 kilometers per hour, is a twin-engine, four-bladed, two-pilot helicopter that scored high ratings for its engine competency and weapons load. Apache is also noted for its target acquisition potential.

The CH-47F Chinook, on the other hand, is an American twin-engine, tandem rotor heavy-lift helicopter. Its speed of 170 knots is faster than other existing utility and attack helicopters. Its main functions include troop movement, artillery emplacement and battlefield resupply. The U.S. Army has been using Boeing's Chinook since 1962.

Boeing has been witnessing strong demand for its commercial as well as defense products, such as fighter jets, the rotorcraft line-up and 737-based military derivatives across the world. In a stringent budget environment, rising foreign military sales contracts are more than welcome. In 2014, non-U.S. customers accounted for approximately 58% of Boeing's revenues.

Zacks Rank

Boeing currently has a Zacks Rank #2 (Buy). Other favorably placed stocks in the aerospace and defense sector include Leidos Holdings, Inc. LDOS , Northrop Grumman Corp. NOC and Lockheed Martin Corp. LMT . While Leidos sports a Zacks Rank #1 (Strong Buy), Northrop and Lockheed carrythe same rank as Boeing

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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