Southwest Airlines announced it is postponing the delivery of 67 Boeing 737 Max 8 aircraft for up to six years to focus on technology and operational improvements. The delay of $1.9 billion in spending comes as delivery plans shift back from 2019 – 2022 to 2023 – 2025.
On Tuesday the Senate approved the 2017 National Defense Authorization Act, which allocates $602 billion in base defense and war spending. The bill proposes aggressive acquisition reforms, which include reduced spending on cost-plus contracts and inclusion of more contractors outside the D.C., Maryland, and Virginia area (“DMV”) on Federal contracts.
The Federal healthcare space is undergoing meaningful transition with both the award of the Veterans Affairs (“VA”) Transformation Twenty-One Total Technology Next Generation (“T4 NextGen”) and award of the Centers for Medicare & Medicaid Services (“CMS”) Strategic Partners Acquisition Readiness Contract (“SPARC”) contract vehicles.
Over the past several years, the aerospace and defense industry has seen a steadily increasing flow of divestiture activity. Since 2010, each year has seen at least as many divestitures as the year before, reaching a high of 57 transactions in 2015.
Cyclical. That word speaks both of opportunity and risk. It also is one descriptor for the aerospace / defense industry. Private equity funds have been investing in the sector for decades (Forstmann Little, the investment firm, bought Gulfstream in 1990 before selling it to General Dynamics nine years later) and continue to be active acquirers in the industry.
In line with its government’s recommendation in early May, Denmark has agreed to purchase 27 of Lockheed Martin’s F-35A Joint Strike Fighters for approximately $3 billion. The new Joint Strike Fighters will replace Denmark’s current fleet of aging F-16s and concludes Denmark’s flight modernization program, which was relaunched in 2013.
Intended to replace the Hellfire missile, a Joint Air-to-Ground Missile (“JAGM”) was successfully fired from a Gray Eagle unmanned aircraft system and hit its target, a truck travelling at twenty miles per hour. According to the U.S. Army’s Joint Attack Munition Systems project manager, this is the first time the JAGM missile has been tested on a drone.
Vietnamese carrier VietJet Aviation announced it will order 100 Boeing 737 Max 200 jets worth an estimated $11.3 billion at list prices. VietJet is one of the fastest growing low-cost airlines in Southeast Asia, and previously only used Airbus A320’s since forming in December 2011. The planes are expected to be delivered between 2019 and 2023, with VietJet estimating strong growth in its aircraft fleet from the thirty-six it has today to more than 200 by the end of 2023.