Boeing's Radar Actively Focused on the Middle East Region for a Potential Rescue Defense Deal

Boeing; in a real tight spot after the resurfacing of 737 MAX issues and after losing billions of dollars in underbid fixed price defense deals; is now looking at procuring potential rescue defense deals from the Middle East region. Boeing has booked significant losses over the recent years on multiple, fixed price defense deals which were actually hugely underbid by the company to undercut competitors and to desperately win new defense deals to bolster its defense business which had multiple platforms at almost the fag end of their lifespan. These fixed price defense deals signed by Boeing, under the Dennis Muilenburg era, have included, the USAF's KC-46A tanker program, MQ-25 Stingray unmanned aerial tanker, the T-7A Red Hawk trainer aircraft and the VC-25B Presidential Air Force One recapitalization; with Boeing having booked losses on all of them since then. The commercial aviation business of Boeing, too, has been facing significant headwinds since pandemic with the discovery of production quality issues on the 787, 737 MAX crisis which refuses to abate with missing door plugs fiasco last month leading to the imposition of a freeze on production ramp-up on the MAX program by the FAA and delays on the certification of MAX 7 and MAX 10 likely besides the delays on the wide body 777-8 and 777-9 programs. Boeing, thus, is in deep waters and is desperately looking for a rescue act, in the form, of a potential, new lucrative defense deal. Boeing is actively looking to expand its share of defense revenues originating from the international markets by almost a third going forward and is actively scouting the Middle East region for a new defense deal. Boeing is actively looking at Saudi Arabia as a potential target and is in active talks to pitch its F-15EX, AH-64EApache, CH-47F Chinook and the latest T-7A Red Hawk Trainer aircraft as potential export candidates. However, Saudi Arabia's requirement for a regional footprint and localization are likely to be potential deal breakers going forward. Boeing already has a regional headquarter based in neighboring UAE and is reported to have been mulling plans to establish one in Saudi Arabia as well, going forward, in the wake of latest developments. Saudi Arabia has been focusing significantly on building defense capabilities over the recent years as political tensions heat up in the Middle East region given the ongoing war in Yemen against the Iran-backed Houthis for years and, especially, after the Hamas' unprecedented attack on Israel in October 2023, and Houthis' attacks on commercial shipping in the Red Sea, which have once again thrust the region into a new wave of military conflicts which is likely to lead to a further increase in defense spending over near-to-medium term. It is likely to translate into a potential windfall for leading global A&D primes with new defense deals highly likely as nations scramble themselves against potential drone and missile attacks while beefing up attack capabilities with fighter jets. Only time will tell whether Boeing, facing almost an existential crisis of sorts, succeeds in making deeper inroads in the Middle East market or not while battling a series of complex and very difficult challenges and a lot will depend on how Boeing plays its cards going forward from here...