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Pentagon Hires Airlines in $1.44 Billion Transportation Agreement

By Rich Smith – Feb 11, 2014 at 8:16PM

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Two large contracts are modified -- making them even larger.

The Department of Defense awarded six defense contracts Tuesday, worth a total of $1.54 billion.

The largest of these awards increases by an estimated $804.8 million the size of an existing contract with a group of carriers dubbed the "Patriot Team" to provide international airlift services to the U.S. Transportation Command. This Patriot Team consists of the following carriers, who are providing these services to the U.S. military:

  • Air Transport Services Group (ATSG -0.66%) subsidiary ABX Air
  • JetBlue Airways (JBLU -0.12%)
  • United Continental (UAL 1.98%)
  • UPS (UPS -3.35%)
  • Five privately held air carriers.

A separate, slightly smaller contract modification with an "Alliance Contractor Team" will be worth $635.5 million, and involves American Airlines (AAL 1.56%) and two other, privately owned carriers.

By virtue of these two contract modifications, all of these firms will continue providing international airlift services to the military through Sept. 30 of this year.

Rich Smith has no position in any stocks mentioned. The Motley Fool recommends UPS. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

JetBlue Airways Stock Quote
JetBlue Airways
$8.00 (-0.12%) $0.01
United Airlines Holdings Stock Quote
United Airlines Holdings
$45.92 (1.98%) $0.89
United Parcel Service Stock Quote
United Parcel Service
$175.10 (-3.35%) $-6.06
Air Transport Services Group Stock Quote
Air Transport Services Group
$27.26 (-0.66%) $0.18
American Airlines Group Stock Quote
American Airlines Group
$14.33 (1.56%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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