Boeing's P-8A Poseidon: It's a 737 -- with missiles. Image source: Boeing.

It's official. The U.S. Navy is buying some more airplanes from Boeing (BA -2.49%). We're not talking F/A-18 fighter jets this time, though, but Boeing 737-800 commercial jets.

You see, the Boeing 737-800 NG is the chassis upon which Boeing builds its P-8A Poseidon maritime patrol aircraft -- a jet-powered surveillance bird designed for anti-submarine and anti-surface warfare, as well as for intelligence, surveillance, and reconnaissance missions. And that means that whenever Boeing Military Aircraft receives an order for Poseidons, Boeing's Commercial Airplanes division must build a batch of 737s first.

Speaking of which...
Last week, the U.S. Department of Defense did in fact announce a contract to buy 20 new P-8A Poseidon maritime patrol aircraft from Boeing. It failed to place the order quite soon enough for the planes to make it onto Boeing's order book last week. But the orders did finally show up this week.

And lucky for Boeing. As it turned out, those new Poseidons -- 16 for the U.S. Navy and four more for the Australian military -- were the only new plane orders Boeing received this week. Added to last week's tally, Boeing's order book now looks like this:

  • 60 orders for single-aisle Boeing 737s
  • Six orders for widebody 777s
  • And one single order for a 787 widebody.

That's 67 gross orders total. And with no cancellations received so far this year, Boeing's net order total is also 67.

Why this matters
Now why is all of this important to Boeing? There are several reasons. First and most obviously, while Boeing's P-8A Poseidon is derived from the 737-800, it's a much more expensive plane. The $2.47 billion contract awarded to Boeing last week works out to $123.5 million per Poseidon -- 29% more than the $96 million sticker price on a basic civilian 737-800. (That's the cost for the airframe and engines, only, by the way. Add in avionics, sensors, weapons, and all the other military tech, and a Poseidon's total cost soars past $170 million per plane). What's more, aircraft valuation and consulting firm Avitas reports that in the real world, Boeing offers airlines steep discounts on that list price.

How steep? According to Avitas, your average 737 might sell for as much as 54% off list price. As a result, when sold to a civilian airline, these 20 737s would produce no more than $44.5 million each ($890 million total). But when sold to the U.S. and Australian militaries, Boeing's revenues roughly triple.

Final point before we close: According to The Wall Street Journal, civilian 737 sales generate "between 40% and 45% of the operating profit" that Boeing Commercial Airplanes earns in a year. This almost certainly makes the civilian 737 the single most profitable aircraft Boeing sells. And the fact that 737s, when destined for transformation into Poseidons, make even more money?

That's just fabulous news for Boeing.