Boeing Sees Boost In Military Contracts Amid War In Middle East

The Middle East war has so far boosted Boeing's defense business and hasn't impacted deliveries to airline customers confronting high jet fuel prices, the company's CEO said Friday.

Kelly Ortberg cited a recent agreement with the US military to triple production of PAC-3 seekers, which identify and strike hostile aircraft and weapons, as an example of increased demand due to the war.

"When you see a major step up in (operations) tempo for our defense products, that opens up the opportunity for more service, spare parts, maintenance actions," Ortberg said during the company's annual meeting.

He described the jump in jet fuel prices as a priority for Boeing's airline customers.

"At this point, I'd have to say we have not seen any impact on airplane deliveries from any of our customers," Ortberg said. "We'll have to watch this and continue to monitor it."

Worries over scarce jet fuel became more acute earlier this week, with the International Energy Agency head saying Europe was about six weeks away from a shortage.

But Boeing's annual meeting started shortly after Iran announced it was reopening the Strait of Hormuz shipping channel, leading to a sharp pullback in oil prices. 

If crude oil deliveries are restored as expected, supply of jet fuel will improve.

Boeing shares rose about four percent in mid-morning trading.

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