Special Report: Orbital UAV has now been selected as the primary engine supplier for Boeing subsidiary Insitu.

For drone-tech company Orbital Corporation (ASX:OEC), a long-standing partnership with global manufacturer Boeing continues to bear fruit.

The company announced today that it signed a memorandum of understanding to be the primary supplier for engines manufactured by Insitu – a Boeing subsidiary which makes unmanned aerial vehicles (UAVs) for the US military.

Orbital makes patented propulsion systems based on more than 10 years of product development, for use in military tactical drones that undertake surveillance and intelligence missions.

The deal means Orbital will be the sole supplier for two Insitu engine models – one currently in production and another one that’s in development.

Status as primary supplier is important, because it increases the size of Orbital’s order book and also puts it in prime position for further production deals with Insitu in accordance with its long-term agreement (LTA) signed in October 2018.

Investors appeared to recognise the importance of the deal, sending shares in Orbital more than 8 per cent higher in morning trade amid broader falls in the share market.

And Orbital CEO Todd Alder said the primary supplier agreement was a by-product of the company’s strong track record over that period.

“Since signing the expanded LTA 17 months ago, we have worked side by side with Insitu, demonstrating our industry leading quality and expertise,” Alder said.

“The MoU represents further confidence in our capability as both a leading manufacturer and designer of the world’s best propulsion solutions for tactical UAVs.”

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This story was developed in collaboration with Orbital UAV, a Stockhead advertiser at the time of publishing. This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.