The Boeing Company BA recently clinched a modification contract to support the F/A-18 depot option program. The award has been provided by the Defense Logistics Agency Aviation, Philadelphia, PA.

Valued at $96 million, the contract is expected to be completed by Apr 9, 2028.

Boeing & Rising Demand for Military Jets

With rising security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending rapidly to enhance their defense arsenals. Meanwhile, developed nations like the United States and Europe are already leading the defense market.

It is imperative to mention in this context that military aircraft, both manned and unmanned, form an integral part of a country’s defense products. Notably, the emerging trends in the combat aircraft space, such as fifth-generation technology aircraft, advanced composite materials and stealth technology have been substantially driving demand for military jets.

The global military jet market is expanding, with North America leading this space. Boeing, being the largest jet maker in the United States, enjoys a dominant position in the global military aircraft market. The company thus enjoys a frequent flow of contracts for military jets and associated upgrades. The latest contract win is a bright example of that.

Growth Prospects

With the United States being the largest worldwide weapons exporter, the nation has been spending amply on defense products. Boeing, the largest aircraft manufacturer in the United States, thus enjoys a dominant position in the combat aircraft market.

Per a Mordor Intelligence report, the global fixed-wing military aircraft market is expected to witness a CAGR of 6.5% during the 2022-2028 period. North America constitutes the largest share of the aforementioned market.

Such growth can be attributed to a rise in global threats and geopolitical instabilities and increased defense spending. These projections should benefit Boeing, along with other U.S.-based combat jet manufacturers like Northrop Grumman NOC, Lockheed Martin LMT and Textron TXT.

Since its inception, Northrop Grumman has been a pioneer in the development of combat manned aircraft. The company has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance and aircraft self-protection systems that enable warfighters to accomplish missions anytime and anywhere, under any conditions.

NOC boasts long-term earnings growth expectation of 3.5%. The Zacks Consensus Estimate for the company’s 2023 sales implies a 4.6% improvement from the 2022 reported figure.