Canada fighter aircraft hunting became stranger



<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Pity Boeing ( NYSE: BA) Shareholders It's starting to look like they bought shares in the gang that they could not shoot directly. " data-reactid = "11"> Compbadion Boeing & # 39; s (NYSE: BA) shareholders. It is beginning to look like they bought shares in the gang that they could not shoot directly.

<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – -sm" type = "text" content = "As a founding member of the international coalition of nine nations that helped Lockheed Martin (NYSE: LMT) designed his F-35 poaching, Canada was logically expected to buy this Lockheed Martin fighter to replace his fleet 60-year old FA-18A CF-18 fighters Canadian variants built by Boeing At least, that was planning until last year.Then, concerns about prices caused Canada to take a second look at Boeing, and consider buying at least a handful of new F / A-18s as it pondered new plans for a larger acquisition. " data-reactid = "12"> As a founding member of the international coalition of nine nations that helped Lockheed Martin (NYSE: LMT) to design his F-35 poaching, logically it was expected that Canada buy this Lockheed Martin fighter to replace its aging fleet of 60 FA-18A CF-18 fighters of Canadian variant built by Boeing. At least, that was the plan until last year. Then, concerns about prices caused Canada to take a second look at Boeing, and consider buying at least a handful of new F / A-18s as it pondered new plans for a larger acquisition.

<p clbad = "canvas-atom canvas -text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Then came the commercial war. Canadian aircraft manufacturer Bombardier (NASDAQOTH): BDRBF) venturing into the United States by selling small commercial aircraft up to a 70% discount on the list price, Boeing applied to the International Trade Commission of the United States to apply import tariffs to the Canadian company, idea a little, and announced last week that, in response, it is canceling its planned purchase of 18 new Boeing F / A-18s (a purchase that could have generated revenue of Boeing up to $ 1,400 million) ". data-reactid = "13"> Then came the commercial war. Irritated at the Canadian aircraft manufacturer Bombardier (NASDAQOTH: BDRBF) making inroads into the United States by selling small commercial aircraft up to a 70% discount on the list price, Boeing requested to the US International Trade Commission Import duties in the Canadian company. Canada did not like this idea at all, and announced last week that, in response, it is canceling its planned purchase of 18 new Boeing F / A-18s (a purchase that could have brought Boeing up to $ 1.4 billion in revenue). .

And that's where things got really weird.

Transparent three-dimensional model of the Boeing F / A-18 Hornet fighter aircraft

Canada has a plan to buy some F-18 at a low price, and Boeing might not like that. Image source: Getty Images.

<h2 clbad = "Canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Buying Boeings, but not Boeing "data-reactid =" 27 "> Purchase of Boeings, but not of Boeing

You see, Canada still likes the lowest price on Boeing fighters – It just does not want give Boeing money, now that Boeing is suing Canada's favorite aerospace shares. So instead of buying F / A-18 directly from Boeing, the Public Utilities and Acquisitions agency of Canada made the following cryptic announcement on Tuesday:

The acquisition of the aircraft that Canada's military needs … is a priority for the Government of Canada. The government is fulfilling its promise to hold an open and transparent competition to permanently replace the Canadian fighter fleet [with] 88 advanced fighter jets [at a later date. Meanwhile,] until the permanent replacement aircraft are in place and fully operational … The Government of Canada will pursue the purchase of 18 additional aircraft from the Australian government.

<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Notice how Canada did not say what type of "supplementary jets" will buy from Australia? funny story.App now reports that Canada plans to buy Boeing F / A- 18 years – but not from Boeing, but from Australia ". data-reactid = "31"> Notice how Canada did not say what type of "supplementary jets" will buy from Australia? Funny story. AP now reports that Canada plans to buy Boeing F / A-18s – but not from Boeing, but from Australia instead.

Okay, these will be used airplanes, but for this reason, it would be much cheaper than the new F / A-18 that Boeing was offering to sell Canada. The additional savings could even help Canada close its budget gap and, when it comes time to buy its additional "advanced 88" warplane, to be able to pay for a fifth generation Lockheed Martin F-35 instead of a fourth generation Boeing F . A-18s.

(Speaking of which, in the same announcement in which it confirmed the Australian purchase of F / A-18, Canada indicated that it plans to award this largest contract for "advanced" fighters in 2022, with delivery to begin in 2025 ).

Therefore, in a bold stroke, Canada rejected a billion-dollar deal with Boeing and put the company at risk of losing another, even greater, in the future.

What it means for Boeing … and for Lockheed Martin

Now, as bad as all this sounds, it's not really a death blow for Boeing. As my fellow Fool Lou Whiteman pointed out earlier in the week, "even without the Canadian order, the prospects for the Super Hornet program today are much healthier than they were just 18 months ago." Among the purchases of the US Navy UU And from other international buyers, Boeing now believes that it has enough work from F-18 in its pipeline to keep its production lines in full flight with Super Hornets until the years 2020.

Still, Boeing He had a much bigger goal in his firearms: the opportunity to snatch a founding member of the Lockheed F-35 consortium and sell dozens and dozens of Super Hornets F / A-18 directly to Canada. Unless and until you resolve your commercial dispute with Bombardier, that opportunity will disappear forever, and Lockheed will have a second chance to reserve up to $ 30 billion in additional sales of F-35 to our northern neighbor, and increasingly lucrative profit margins, too.

Good news for Lockheed Martin, but bad news for Boeing.

<p clbad = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 43 "> More from The Motley Fool

<p clbad =" Canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Rich Smith has no position in any of the mentioned populations The Motley Fool has no position in any of the aforementioned actions.The Motley Fool has a disclosure policy. " data-reactid = "51"> Rich Smith does not have a position in any of the actions mentioned. The Motley Fool has no position in any of the actions mentioned. The Motley Fool has a disclosure policy.


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