Boeing's Hypersonic Investment Could Give It an Edge
For effective stock trading and investing you need to watch out for any innovations that could shape the destiny of stocks by giving the companies they represent a vital edge. For stocks in the aeronautical industry, a technological advancement and a government order for new aircraft or weapons can do them a world of good. And that's what Boeing ($BA) is trying to achieve.
Boeing's HorizonX Invests in Hypersonic Tech Developer
Boeing is looking to have an edge amidst the competition, and that's why it's joining the new rocket race by investing in hypersonic engines with its HorizonX division. It is joining hands with Rolls-Royce ($RYCEY) and BAE Systems ($BAESY) for providing the British firm, Reaction Engines, series B funding worth $37.3 million for developing hybrid engines that can travel 5 times faster than sound, within earth's atmosphere, and up to Mach 25 in space. Boeing's rivals are interested in this technology as well though it is Boeing that has taken the early plunge. The Pentagon is keenly watching for developments in this revolutionary space. Such a technology has significant military and space implications.
Remembering Boeing-led Coalition's Earlier Hypersonic Experiment
Boeing is no stranger to hypersonic flight. Its X-51 Waverider scramjet experimental flight of 2013 is still fresh in memory. The X-51 program was in fact a joint effort of Boeing with the US Air Force, NASA, DARPA (U.S. Defense Advanced Research Projects Agency) and Pratt & Whitney Rocketdyne. The technology behind the X-51 was proposed to be used in a missile called the High Speed Strike Weapon (HSSW) to be pressed into service by the mid-2020s, and that can travel in excess of Mach 5.
The Urgent Need for Hypersonic Missiles
Now though, Boeing is competing with Northrop Grumman, Lockheed Martin and Raytheon for securing a US Air Force contract for a hypersonic strike weapon. The pressure is on now, particularly since the Russian military has revealed that it already tested a hypersonic missile with nuclear capabilities that can even out-maneuver and outrun enemy defenses. That means the heat is on for the United States to update its missile arsenal with such faster missiles.
Since the Air Force's tender for a precision-guided hypersonic missile was given out last summer, it could complete the selection process by the first half of 2018. Boeing doesn't want to miss out on any more hypersonic contracts after Lockheed Martin and Raytheon grabbed over $300 million worth of DARPA's air-breathing, hypersonic weapons contracts last fall. That explains Boeing's investment into Reaction Engines.
Founded in 1989, Reaction Engines is targeting testing an engine core, combining rocket and jet technologies for producing ultrafast speeds, by 2020. It is building a test facility in England and has raised around $142 million in funding. The company also has a DARPA contract for testing one of its technologies.
Boeing's HorizonX plans to leverage the technology of Reaction Engines for its future aircraft designs and research, in its quest for hypersonic flight. That could give Boeing a significant edge over the competition, something for the shareholders to rejoice particularly if the company manages to get to the forefront of the hypersonic race. The Pentagon has given enough indications that hypersonic will be its area of focus and expenditure in the coming years.
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