Despite Kuwait deal, Boeing's F/A-18 jet faces uphill global climb

Thu May 7, 2015 5:53pm EDT
 
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By Andrea Shalal

WASHINGTON May 7 (Reuters) - Boeing Co will struggle to boost international sales of its F/A-18E/F Super Hornet fighter jets despite a $3-billion-plus deal expected soon with Kuwait, analysts and industry executives said.

On Wednesday, Reuters reported that Kuwait is poised to announce in coming weeks an order for 28 Super Hornets. On Thursday, people familiar with the Kuwait deal said it also includes options for up to 12 additional jets.

The Kuwait order will help extend production at Boeing's St. Louis facility into 2019, and preserve its ability to compete for fighter orders from Canada, Denmark, Malaysia and Belgium.

But the Kuwait order was only the second foreign order for the jets after years of talks, and it is far from a "major breakthrough" for Super Hornets on the global fighter market, said Richard Aboulafia, analyst with the Virginia-based Teal Group.

Canada and Denmark remained "outside possibilities" for further F/A-18 orders, he said, citing both countries' investment in the F-35 Joint Strike Fighter being developed by Lockheed Martin Corp for the U.S. military and eight partner countries.

Byron Callan with Capital Alpha Securities agreed that sales to Canada and Denmark were "long shots" for Boeing.

He said the Kuwait deal was unlikely to trigger further F/A-18 sales in the Middle East given that most other countries are already ordering jets from other companies. He also cited the region's continued longer-term interest in the F-35.

"There aren't any other doors to open," Callan said.   Continued...