The US Navy has awarded Boeing a combined $3.1 billion in contracts for Harpoon and Standoff Land Attack Missile –Expanded Response weapon systems in support of foreign military sales. About $2.6 billion of that was contracted in this deal, while the remainder had been previously awarded.
While Boeing’s defence projects and contracts have been continuing although interrupted by the global pandemic, it’s commercial aircraft manufacturing has seen major drops in demand. This has led to its aircraft backlog dropping by 500 aircraft as no new orders were placed in April and it only delivered five planes during the month.
Last month, the manufacturer’s customers cancelled orders for 108 737 MAX aircraft. General Electric’s leasing branch GECAS cancelled 69 of these narrow-bodies while China Development Bank Financing dropped 29 of them.
A further 99 MAX orders that had previously been booked from the producer’s official backlog. These deleted units were initially planned for carriers that are now facing financial struggles due to the global health crisis.
In March, there were 150 MAX orders cancelled. These cuts include Brazilian outfit Gol’s 34 scrapped orders and leasing company Avalon’s 75 cancellations.
“We are in an unpredictable and fast-changing environment, and it is difficult to estimate when the situation will stabilise,” CEO David Calhoun had previously stated.
“When it does, the commercial market will be smaller, and our customers’ needs will be different.”
On the defence deal, Cindy Gruensfelder, vice president of Boeing Weapons, said, “We are pleased to continue our long legacy of partnering with the Navy to build weapons that defend America and its international partners.
“These awards will not only extend production of the Harpoon program through 2026, they will also restart the production line for SLAM-ER and ensure deliveries through 2028.”
Boeing last delivered the SLAM-ER weapon system in 2008. In October 2019, Boeing began construction on a new 35,000 square foot manufacturing facility to support increased production for the Harpoon and SLAM-ER programs. Construction is expected to be complete in 2021.
