In the course of signing a deal expected to "save" U.S. taxpayers $800 million, Boeing (NYSE:BA) has just snagged itself a revenue stream $4 billion deep.
On Tuesday, Boeing announced that it has signed an agreement to build 177 CH-47F Chinook heavy lift helicopters for the U.S. Army over the course of several years. The contract contains an "option" for the Army to increase its buy, increasing the total number of helos that might be built to 215. In such an event, this week's order could nearly double the size of the Army's Chinook fleet to 464 aircraft and push the total contract value past $4.8 billion.
In a statement, Boeing noted that by making the bulk order of Chinooks, "the Army is benefiting not only from the efficiencies of a multi-year contract but also from the production efficiency gains Boeing and our suppliers have made." It puts the total savings at $800 million versus the likely cost of building the helos in smaller, on-again, off-again production spurts.
Boeing will begin delivering the Chinooks to the Army in 2015.
Boeing describes the Chinook as a tandem-rotor helicopter as "the backbone of combat, logistics, and humanitarian operations for the U.S. Army and 18 other operators around the world." Fifteen active duty Army and National Guard units operate the CH-47F currently, and a 16th is currently being equipped.
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