Boeing Fighter-Jet Sales Advance Toward Final Approval
November 18 2016 - 1:40AM
Dow Jones News
Boeing Co. moved closer to extending the life of its combat-jet
production lines with the State Department's approval of sales to
Kuwait and Qatar worth up to $31.2 billion combined.
With that barrier cleared Thursday, the long-delayed deals now
go before Congress for final approval. Lawmakers have already been
informally briefed, allowing the Pentagon and Boeing to press ahead
with completing terms for the government-to-government
transaction.
Qatar wants to buy as many as 72 Boeing F-15 fighters that
together with weapons and support could be worth $21.1 billion, the
Pentagon said. However, Qatar could still split any buy between
Boeing and the Eurofighter Typhoon jet.
Kuwait wants 32 Boeing F/A-18 jets at a cost of $10.1 billion,
including weapons and support systems, the Pentagon said. Kuwait
signed a deal earlier this year with Leonardo SpA to buy 28
Typhoons.
Middle Eastern countries' interest in combat jets comes despite
budget pressure from falling oil prices, the main source of revenue
for countries such as Saudi Arabia and Kuwait.
Boeing faced having to shut down the St. Louis, Mo., production
lines for both jets by the end of the decade unless it secured
export deals. It is also trying to sell more F/A-18s to the U.S.
Navy, but the U.S.—as it shifts to the Lockheed Martin Corp.
F-35—won't buy any more F-15s as it.
Chicago-based Boeing also is trying to sell the F/A-18 to India,
a deal that could require it to build the planes there.
Leanne Caret, head of Boeing's defense unit, has made waves
inside and outside the company by saying its decadeslong history of
producing fighters is likely to end in the early 2020s.
Orders for its F-15 and F/A-18 jets have been drying up for
years, forcing production to slow, but Ms. Caret is the first
Boeing executive to face a future without fighter production as a
centerpiece of the unit's strategy. Her plan is to replace sales
revenue by doing more repair and upgrade work on the hundreds of
its jets already flying.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
November 18, 2016 01:25 ET (06:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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