The Boeing Company (BA Quick QuoteBA - Free Report) recently won a contract involving the P-8A aircraft program. The Naval Air Warfare Center Training Systems Division, Orlando, FL awarded the deal.

Details of the Deal

Valued at $55.4 million, the contract is projected to get completed by July 2025. Per the terms, Boeing will deliver training systems hardware for P-8A like Operational Flight Trainer, Weapons Tactics Trainer, Virtual Maintenance Trainer, Maintenance Support Cabinet and a few more.

The contract will serve the government of Korea.

Importance of P-8A Poseidon

The P-8A Poseidon, a multi-mission maritime patrol aircraft, can perform anti-submarine and anti-surface warfare, intelligence, surveillance and reconnaissance, and search and rescue missions. Seven nations across the globe have selected the P-8A as their future maritime patrol aircraft including South Korea and New Zealand. In February 2020, Britain’s Royal Air Force (RAF) received its first P-8A aircraft, whereas in March 2021, Boeing won a $1.6 billion contract for the production and delivery of 11 P-8A jets to the U.S. Navy and the government of Australia.

Last month, the company won another contract worth $757 million for the production and delivery of 12 P-8A jets to Germany. Such frequent contract inflows, including the latest one, indicate the global demand that this jet model enjoys.

What’s Favoring Boeing?

Of the varied defense equipment that Boeing manufactures, the company’s strength lies in the development of combat-proven aircraft such as the P-8A Poseidon. Additionally, Boeing started developing military aerial refueling and strategic transport aircraft for its fixed-wing military aircraft programs. Such notable developments are anticipated to fuel this aerospace giant’s growth, considering the increasing defense spending provisions made by the current U.S. administration.

Being the United States’ largest jet maker, Boeing enjoys a smooth flow of contracts for military jets and associated upgrades. The latest contract win is an example of the same. 

Growth Prospects

Per a Mordor Intelligence report, the global maritime patrol aircraft market is anticipated to witness a CAGR of more than 5% during the 2022-2027 period. The heightening threat of global terrorism and geo-political issues alongside the need to replace aging maritime patrol aircraft with a new and advanced fleet will likely spur demand for maritime patrol aircraft during the forecast period, thereby boosting the growth of the market.

Notably, major industry players poised to gain from surging maritime aircraft demand include Boeing, Lockheed Martin (LMT Quick QuoteLMT - Free Report) , Textron (TXT Quick QuoteTXT - Free Report) and Northrop Grumman (NOC Quick QuoteNOC - Free Report) .

Lockheed’s maritime patrol aircraft, P-3 Orion performs air, surface and subsurface patrol and reconnaissance tasks over extended periods and far from support facilities.

LMT stock boasts a long-term earnings growth rate of 5.7%. The Zacks Consensus Estimate for 2022 earnings indicates growth of 18.4% from the 2021 reported figure.

Textron’s King Air 260 jets provide the right balance of durability and operating economics for maritime patrol missions.

TXT stock boasts a long-term earnings growth rate of 11.8%. The Zacks Consensus Estimate for 2022 earnings suggests growth of 21.8% from the 2021 reported figure.

Northrop Grumman’s MQ-4C Triton unmanned aircraft system provides real-time intelligence, surveillance and reconnaissance over vast ocean and coastal regions.

NOC stock boasts a long-term earnings growth rate of 6.2%. The Zacks Consensus Estimate for 2022 sales implies growth of 2.6% from the 2021 reported figure.