LMT Does RERP Modernization - Analyst Blog

Lockheed Martin Corp. (LMT) recently inducted its second C-5 Galaxy strategic transport into the Reliability Enhancement and Re-engining Program (RERP) production line at its Marietta, Georgia, facility.
 
Currently, the Air Force expects Lockheed Martin to deliver 52 C-5Ms by 2016. Three C-5Ms, the former Super Galaxy test fleet, have been redelivered to the U.S. Air Force at Dover Air Force Base.
 
The RERP modifications consist of more than 70 improvements and upgrades to the C-5 airframe and aircraft systems, and include the installation of new higher-thrust, more reliable turbofan engines.
 
The C-5M is the product of a two-phase modernization effort. In the first phase of modernization, the aircraft is given a state-of-the-art glass cockpit with modern avionics and flight instruments – called the Avionics Modernization Program (AMP). Nearly half of the C-5 aircraft fleet has already undergone the AMP modifications.
 
RERP is the second phase of the C-5 modernization effort. The second aircraft to enter the RERP production line is a C-5B based at Dover Air Force Base, Delaware. This aircraft, U.S. Air Force serial number 85-0002, was first delivered to Travis Air Force Base, California, on Sept 30, 1986, and was stationed there for much of its career, until it moved to Dover. This C-5 Galaxy currently has more than 19,000 flight hours.
 
Each RERP aircraft induction is a major milestone for Lockheed’s modernization program. Every C-5M gives added strength to the U.S. Air Force fleet and the war fighters who protect the country.
 
Lockheed Martin remains a key player in the defense industry catering to the U.S. Government, foreign governments and other commercial buyers. Lockheed’s traditional defense focus appears strong, with increasing interest from domestic and international customers. In addition, management intends to explore strong business opportunities beyond the traditional defense market, specifically in the areas of civil, governmental and commercial space businesses. Going forward, we believe LMT has significant upside potential based on strong defense outlays throughout 2009-10, above-industry average return-on-invested-capital and expanding product lines.
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