Lockheed Expands Airport Solution Biz - Analyst Blog

Aerospace & defense major Lockheed Martin Corporation LMT acquired Karlsruhe, Germany based BEONTRA AG a leading provider of integrated planning and demand forecasting tools for airports around the world. BEONTRA has more than 40 airport operator customers across five continents. The financial terms of the deal were not disclosed.

The International Air Transport Association (IATA) predicted that the airline industry is on track to deliver the second consecutive year of improved profitability on the back of increasing air traffic. In addition, the long-term commercial market outlook from The Boeing Co. BA indicates a 5% annual increase in passenger traffic for the next two decades.

Given the prospering airline industry it is obvious that airports around the world need to equip themselves to serve the busy air traffic. Lockheed is planning to take advantage of this underserved market and has started to strengthen its commercial aviation product and service portfolio.

BEONTRA has the capability to forecast demand for air traffic capacity, planning for route and infrastructure development. The integration of this latest acquisition with Chroma Airport Suite's progressive airport operating system (also recently acquired) will help Lockheed to capture the rapidly expanding commercial airport information technology solutions market.

Moreover, the acquired companies already have the best airports across the globe as their customers. More airports are sure to spring up, particularly in the growing Asia-Pacific region. Lockheed with its existing product portfolio will be in an advantageous position to provide integrated solutions to the next generation airports.

Lockheed currently has a Zacks Rank #2 (Buy). Other players in the aerospace and defense industry, which look attractive at current levels, include Huntington Ingalls Industries, Inc. HII and Northrop Grumman Corporation NOC. Huntington Ingalls carries a Zacks Rank #1 (Strong Buy) while Northrop holds a Zacks Rank #2 (Buy).