Red Tape Barrier In Approving Orders By US May Force Boeing To Invest Significant Fund In F/A-18 Jet Program

February 14
1:28 AM 2016

Boeing Co. is believed to go for an investment plan of a significant amount to continue production in its Saint Louis plant. The plan for investment related to production of 28 jets against a delayed order from Kuwait, seems to be unusual since the deal still requires approval from the US government.

The aircraft manufacturer will have to decide for purchasing titanium and other materials for manufacturing jets in coming weeks. Decision on investment may be taken prior to Kuwait deal or finalization of potential orders by US Navy, reports Reuters quoting Dan Gillian, chief of Boeing's F/A-18E/F and EA-18G electronic attack jet programs.

Further delay in orders for the jets will compel Boeing to decide on investing hundreds of millions of dollar into the F/A-18 program. Situation gets complicated since its commercial division is going through job cuts and a federal investigation on accountability of two jetliners, the 747 and 787, according to a report published in Business Insider.

The F/A-18 Super Hornet is a twin-engine, supersonic, all weather multi-role fighter jet that is capable of landing and taking off from an aircraft carrier. Every Super Hornet has been delivered on cost and on schedule, according to the description furnished in the Boeing website.

Boeing has been encouraged to invest with the funding proposal made by US Navy. The Navy intends to purchase two F/A-18E/F Super Hornets in a supplemental war budget and 14 more jets in the fiscal 2018 base budget.

Congress has approved such supplemental war budget to help the Navy deal with a shortfall in carrier based fighter. Lawmakers have ultimately added $1.1 billion to the Navy's fiscal 2016 budget to buy five F/A-18E/F Super Hornets and seven EA-18G Growlers.

Current Navy orders will keep the St. Louis plant running up to June 2018. However,the line may continue into the early 2020s if the additional Navy and Kuwait orders are approved. The approval will put Boeing in a stronger position to compete for potential orders from Finland, Belgium, Spain and Denmark.

U.S. defense officials have raised concerns over the slow pace of arms sales approvals. In separate incident, delays have prompted Qatar to halve its expected purchase of F-15s. Meanwhile the gulf nation has pursued a separate deal with France's Dassault Aviation for 24 Rafale fighter jets.

Delay in finalizing arms deals by the US government has become a regular issue. Qatar has reportedly halved the purchase order of F-15 in earlier event. Now, Boeing appears as a victim of red tape barrier existed in awarding approval for arms purchase. The aircraft manufacturer may even be forced to invest a significant fund with uncertainty for cancellation, centering such delay, to maintain its production line.

© 2022 VCPOST, All rights reserved. Do not reproduce without permission.


Join the Conversation

Subscribe to VCpost newsletter

Sign up for our Deals of the Day newsletter.
We will not spam you!

Real Time Analytics