Boeing Lands $1.5 Billion Deal to Supply P-8s to US, Australia

Boeing Co., the world's largest aerospace company, landed a $1.5 billion contract to supply P-8 Poseidon aircraft to the U.S. and Australia.

The deal, announced Thursday evening by the Pentagon, calls for delivering 13 more of the maritime surveillance aircraft, including the first four for the Australian military and another nine for the U.S. Navy. That will bring the Navy's fleet total to 62, of which Boeing has delivered 28 to date, according to a press release from Boeing.

"By working together since the early stages of P-8A development, the U.S. and Australia have created one airplane configuration that serves the needs of both countries," Capt. Scott Dillon, U.S. Navy P-8 program manager, said in the release. "The U.S. and Australian P-8As will be able to operate with each other effectively and affordably for decades to come."

Based on Boeing's 737-800 commercial airliner, the P-8A provides advanced anti-submarine, anti-surface warfare and intelligence, surveillance and reconnaissance capabilities. The Navy has deployed the first two P-8A patrol squadrons since operations started in 2013. The aircraft will eventually replace the P-3 Orion made by Lockheed Martin Corp.

The U.S. military displayed a P-8 along with other aircraft this summer at the Paris Air Show held outside the city at the historic Le Bourget airfield. The surveillance aircraft in February completed a seven-month deployment to the Pacific, where it successfully spotted dozens of foreign submarines, as evidenced by the decals dotting its fuselage.

During recent deployments, P-8s have tracked Chinese submarines -- and the Chinese have noticed. Last summer, a Chinese fighter jet intercepted a Poseidon over the South China Sea in international airspace and performed a barrel roll over it.

"As it's getting operationally deployed, we're learning more and more," Chris Raymond, a vice president at Boeing, said in an interview at the show. Crews are coming back and describing its performance as a game-changer, he added, "so I think as the capability gets out there and starts being exercised, it's doing what it's supposed to do."

Overall, the service plans to buy 114 of the new P-8 aircraft at an estimated cost of $32.8 billion, according to Pentagon budget documents. The Chicago-based aerospace giant also has contracts to deliver as many as a dozen of the aircraft to the governments of India and Australia, and is working to find more international customers.

"The international interest is developing," Raymond said. "Whether it's commercial threats, natural resource threats, regional security concerns, I do think this maritime space for a lot of people is going to become more and more important."