Boeing will get USAF tanker contract - unopposed

Northrop Grumman Corp. is going to walk away from the USAF US $100 Bn for 179 re-fuelling tankers to replace the ageing fleet of Boeing KC-135's.

Grumman had been offering a version of Airbus' 330 and to make commercial sense included cargo carrying options which have been turned down in discussions between the Pentagon and the Air Force on Wednesday this week. In August Boeing shuttered their last plant in Southern Califormia which made the huge military transport Globemaster III or C-17 - at the time Boeing said this would affect 25,000 employees of the nearly 700 companies in 42 states that supply parts and systems for the plane.

That will leave Boeing a home run.

Airplane industry booming globally

The airplane industry will require 27,000 new planes costing $2.6 trillion. in the next 20 years. After 9/11 Boeing - had to cut jetliner production and shed 40,000 of its 93,000 employees who designed and built the planes - they were busy making the JDAM bomb kits and missiles however.

Over the next 20 years, it is said that China will need 2,900 new passenger and freight aircraft costing $280 billion, and India will need 856, worth $72 billion. Airbus are now rapidly developing their manufacturing facilities in China.

Many forget that planes also carry cargo - Fred Smith, founder and CEO of FedEx, says that 98 % by weight of international trade travels by sea the 2 percent moved by air constitutes 40 percent of the economic value.

From Jan 1st 2007 Fedex has imposed a net 3.5% average price increase on U.S. domestic and U.S. export express shipments, and a 4.9% average price increase on FedEx Ground services.

In Q2 2007 FedEx Corp. reported Revenue up 10% , net income up 8% and an increase in earnings per share up by 24% from Q2 2006.

Alan B. Graf, Jr., CFO attributed the sound results to ..." lower than expected fuel prices" .."growth at FedEx Ground (average daily package volume grew 14% year over year in Q2) and insurance proceeds related to Hurricane Katrina".