Aerospace & Defense Update
The 2015 Dubai Airshow had very few contract announcements, as commercial and defense customers were not very active during the show. There were no major orders announced on the first day, which is disappointing in contrast to the record $192 billion orders on the first day of the 2013 Dubai Airshow. While many expected commercial orders to be low considering commercial aircraft needs have already been met, the relative inactivity during the first day still came as a surprise to many. However, on the second day of the Dubai Airshow, Boeing received an $8 billion order from India’s Jet Airways for 75 737 Max 8 narrow-body jetliners. The deal, which was previously listed as an order from an undisclosed customer, includes upgrading its prior commitment of 25 current version 737’s for the new “Max” jetliner, in addition to a provision to purchase 50 more aircraft. The 737 Max jetliner will be introduced in 2017, but Jet Airways won’t receive its first delivery until 2018. India’s growth in air passenger travel is one of the key drivers of the agreement, as domestic airplane passengers are expected to double over the next seven to eight years according to Jet Airways Chairman Naresh Goyal.
Government Technology Solutions Update
Federal spending on Big Data and cloud services is likely to increase according to a recent Deltek analysis. Deltek projects that Federal demand for cloud computing services and Big Data will increase by a Compound Annual Growth Rate (“CAGR”) of 21.4% and 14.4%, respectively, between GFY15 and GFY20, growing from a combined $4.0 billion in GFY15 to a combined $9.4 billion in GFY20. The growing trend reflects concerns about cybersecurity as well as an increased emphasis on improving efficiency. While these technologies exist within Federal agencies already to some degree, the near-term focus of Federal cyber officials will be on better understanding the entire spectrum of capabilities available, as well methods to procure them under traditional acquisition procedures.
As part of a broader effort to improve cybersecurity at the Department of Homeland Security (“DHS”), the Office of Personnel Management (“OPM”) approved the hiring of 1,000 new cyber professionals at DHS. The new hires will be on-boarded between now and June 30, 2016. Since OPM has yet to establish specific qualifications for cyber professionals, DHS needed special hiring authority to increase the number of its cyber-focused personnel. The new employees will be tasked with aiding DHS’s already significant cybersecurity mission, conducting risk and strategic analyses, incident handling, and vulnerability assessments, among other duties.
KEYW (Down 22.7%) – Shares were down this week in response to the company reporting worse than expected loss during its 3Q15 earnings.
Boeing (Down 3.6%) – Shares were down this week as macroeconomic influences outweighed its announcement of receiving an $8 billion order with India’s Jet Airways.
Kaman Aerospace Group to acquire GRW Bearing GmbH, a developer and manufacturer of high-precision miniature ball bearings for manufacturing operations. The terms of the deal were not disclosed.