Boeing inks $477M defense deal

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On October 13, 2020, Boeing announced receiving a $477 million contract from United States Defense Logistics Agency (DLA) for supplies, supply chain management and logistics services of weapons systems platforms.

Under the contract, Boeing will be engaged in every step of parts acquisition, from forecasting the demand to shipping. The company’s press release specifies that the deal concerns provision of weapon systems for military units involved in active combat (so-called warfighters).

The first phase of the deal includes supply chain management of Boeing-licensed Honeywell parts, valued at $39 million. Honeywell produces a number of aircraft components for Boeing, including air turbines for engines of AH-64 Apache and CH-47 Chinook helicopters, navigation systems for F-15 Eagle fighter jets, as well as avionics components for a number of military and civilian aircraft. 

According to the release, the work will be completed over a five-year period, with an option to extend it by another five years.

The deal comes as Boeing is struggling, its Commercial airplanes division being heavily impacted by a lack of revenue amidst current crises. The defense, Space and Security sectors are overtaking the previously-dominating civilian sector by revenue and remain the only steady flow of cash for the American aerospace giant.

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