Lockheed Martin Corp. LMT has sealed its first order, worth $480 million, for a dozen cargo-carrying hybrid airships that its top secret Skunk Works division has been developing for over a decade.
Airships were hit after Hindenburg's ruin in 1937. However, this is likely to make a come back with Lockheed Martin’s Hybrid Airships. UK-based Straightline Aviation (SLA) has signed a letter of intent on Wednesday to buy 12 Hybrid Airships, the first delivery of which is expected in 2018. The deliveries will continue for roughly two years.
Lockheed’s Hybrid Airships
LMH-1 airship, developed by Lockheed Martin and chief competitor Hybrid Air Vehicles Ltd., is the inheritor of the Pentagon program that required airships for offering uninterrupted aerial surveillance over wide areas during the wars in Iraq and Afghanistan. However, tepid defense budget, hike in helium prices and the winding down of U.S. military activities in those conflict-torn areas hit the program.
But Lockheed Martin continued to invest in airship designs, looking for the right size, capability, and markets. Its LMH-1 airship can carry 20 metric tons of freight and 19 passengers, along with the crew. Hybrid Airship has a unique, tri-lobe shape and air cushion landing system and can transport cargo and passengers to and from the most remote locations at a reasonable cost. They require minimum or no fixed ground infrastructure and burn considerably less fuel compared to conventional aircraft, making it an environmentally friendly way of delivering cargo to out-of-the-way locations.
SLA has plans to target the oil, gas, and mining industries that spend a huge amount of money on logistics per year for building roads, helipads, and other infrastructure.
The Competition
Hybrid Air Vehicles unveiled its Airlander 10 recently targeting the tourism market. Airlander 10 was labeled as the world's largest aircraft and a lighter-than-air hybrid. SLA however may extend its scope to commercial passenger travel in the future, along with other potential markets including disaster relief, communications, agriculture and renewable energy.
Zacks Rank
Lockheed Martin currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the defense space include TransDigm Group Incorporated TDG, AeroVironment, Inc. AVAV and Spirit AeroSystems Holdings, Inc. SPR. While TransDigm sports a Zacks Rank #1 (Strong Buy), AeroVironment and Spirit AeroSystems carry a Zacks Rank #2 (Buy).
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