Rumors of Indian C-17 Contract Closure

by: Matthew Potter
September 29, 2010

Category: Boeing, Business Line, Companies, Congress, Contract Awards, Countries, Department of Defense, EADS, Events, Federal Budget Process, India, Kuwait, Lockheed Martin, Military Aviation, production program, Proposal, SAAB, Services, U.S. Air Force | RSS 2.0

Unless there is a miracle in the 2011 defense budget whenever it is passed by Congress the last C-17 for the U.S. Air Force has been funded. The strategic transport has received several plus ups in recent budgets to buy aircraft beyond what the Air Force and Department of Defense has planned. Boeing (BA) is already planning the winding down of the production line and the factory in Long Beach, CA.

The C-17 has seen heavy use in the current operations in Iraq and Afghanistan as lift is one of the most important force projections and support assets. Even though the mission the aircraft carries out is important the Obama Administration made ending production one part of their defense spending reforms. In the 2009 and 2010 budgets they accepted the additional aircraft from Congress as part of getting their other changes through including ending F-22 procurement.

The C-17 has been purchased by some foreign customers and the U.S. and Boeing have aggressively marketed it to others. The aircraft remains the only Western long range strategic transport in production alongside Lockheed Martin’s (LMT) shorter ranged and smaller C-130J. EADS (EADS:P) is now offering their A400M transport which falls between the two U.S. aircraft offering longer range then the C-130 and smaller cargo capability compared to the C-17.

Now it seems some of these efforts are paying off. Reportedly Kuwait wants to purchase at least one of the aircraft and India is ready to close on a deal for ten. The total value of these sales is over $4 billion.

India has long tried to develop their indigenous arms industry while buying selected Russian and Western equipment. Over the last few years in a bid to modernize their military and raise their general technological level they have attempted to purchase more U.S. equipment. These have included Boeing P-8I maritime patrol aircraft and an ongoing competition for a new fighter that includes bids from Boeing, Lockheed, MiG, Daussault and SAAB. The C-17 buy would be part of this effort.

The more foreign sales that Boeing can secure the longer it can keep the production line open and people in California employed. The Indian sale would be quite an addition as it would become the largest fleet outside of the U.S. These sales will be much appreciated by Boeing and its workers.

Photo from TMWolf’s flickr photostream.

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