The Boeing Company (BA) has entered into an agreement with SELEX Sistemi Integrati, S.p.A – a Finmeccanica company – to work together on the Single European Sky ATM Research (“SESAR”) program's development phase. SELEX Sistemi Integrati is a leading industry supplier of air traffic management and airport systems.
Single European Sky ATM Research is a collaborative project that aims at overhauling the European airspace and its Air Traffic Management (“ATM”) completely. It is the European air traffic modernization program that helps to confront Europe's air traffic management challenges. By synchronizing and concentrating on all relevant research and development efforts, the main objective of SESAR is to enable the modernization of the European air traffic management system.
In collaboration with SELEX, Boeing will assist in the research of flight data modeling and data link communications for all phases of flight, and system-wide information management. Both parties had signed a Memorandum of Collaboration, in October 2011, to work towards the compatibility of global air traffic management systems.
On a stand alone basis, Boeing Company is a premier jet aircraft manufacturer and one of the largest defense contractors in the U.S. We expect commercial aircraft growth momentum to be maintained by planned production rate increases and a globally diversified customer base. The company is also supported by the U.S. defense budget that is skewed towards a number of prominent Boeing programs.
Despite Boeing’s balanced exposure to commercial aircraft and defense equipment, the company competes with industry majors like Lockheed Martin Corporation (LMT) and Northrop Grumman Corporation (NOC).
Headwinds in the global airline industry along with expected cutbacks in the U.S. defense budget loom large. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
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