Boeing appears to be on the verge of securing a long cherished breakthrough order from India that would add 10 more C-17s to the orderbook, ensuring continued production at Long Beach, California into 2013.
According to a report being filed by my colleague Neelam Mathews, India’s Ministry of Defense has sent a Letter of Request to the U.S. government for a Foreign Military Sales purchase of 10 C-17s. Assuming this is officially confirmed on Jan 8, the news marks a dramatic revival in fortunes for the beleaguered line which has been under threat of closure for almost four years as the backlog dwindled and the company fought to preserve a viable line that could make international sales affordable.
America to Agra? The C-17's rugged short field performance (as shown here in this tactical take-off from Bicycle Lake, Calif.) seems to have impressed in India. (Boeing)
Coming hot on the heels of this week’s confirmation of the order for six C-17s from the United Arab Emirates, plus recent clearance for the further acquisition of 10 more for the U.S. Air Force and a seventh for the U.K., the Indian order would extend firm orders to 259. Of these, some 212 have been delivered leaving a potential undelivered backlog of 47. At Boeing’s current production rate of 15 a year this provides sufficient work for more than three years worth of manufacturing, though the company is exploring ways of trimming back the rate to extend the production run.
Ironically some of these studies are understood to have been sparked in part, at least, by the desire to keep the line active to accommodate India’s wishes for deliveries to be stretched out over several years. Part of the problem closing the deal with India is believed to have centered on devising a compromise between the protracted delivery schedule and the realities of maintaining the line with the shrinking orderbook.
It seems possible therefore that the spate of late orders may provide Boeing with a bigger cushion than it dared hope for as its rate studies proceed. While 15 more aircraft are planned for 2010, the boost of 17 international orders could enable it to ease back production to around 12 to 13 per year for 2011 onwards and keep it viable for additional business both at home and abroad. It seems the massive gamble Boeing took several years ago to support long lead suppliers on its own nickel is about to pay off.