By Andrea Shalal
WASHINGTON (Reuters) - The U.S. Navy plans to buy V-22 tiltrotor aircraft built by Boeing Co and Textron Inc's Bell Helicopter unit to replace the older C-2A turboprop aircraft it now uses to ferry passengers and cargo to aircraft carriers, two people familiar with the issue said late Tuesday.
The sources, who were not authorized to speak publicly, confirmed that top Navy and Marine Corps officials had signed a memorandum of understanding on Jan. 5 that maps out their plans to use the V-22 for the carrier on-board delivery (COD) mission.
The news, first reported earlier Tuesday by Breaking Defense, an online defense magazine, marks a blow to Northrop Grumman Corp, which built the original C-2A planes and had proposed building a modernized version of the planes.
The agreement calls for the Navy to buy four V-22s each year from fiscal 2018 to fiscal 2020, a decision strongly advocated by the Marine Corps, which has argued that extra orders will keep the V-22 production line open, could lower costs of future aircraft, and should help reduce maintenance costs.
The agreement must be ratified by Congress as part of future budget legislation, and depends in part on a third multiyear procurement agreement that would begin in fiscal 2018, according to Breaking Defense.
Marine Corps and Navy officials have lauded the performance of the V-22 aircraft, which takes off and lands like a helicopter but can tilt its propellers to fly like a plane, with far greater range and speed than a conventional helicopter.
The Marines have used the aircraft since 2007, while the Air Force began using the planes in 2009.
Boeing and Bell Helicopter are also pursuing international sales to Japan, Israel and other countries.
Officials at Northrop and Boeing declined comment on the news. Officials at Bell were not immediately available to comment.
Northrop has little recourse, other than asking lawmakers to intervene on the company's behalf. It has said that new C-2s would be cheaper to build and operate than the larger V-22s.
Buying V-22s had long been the preferred option, given the capabilities of the aircraft and the advantage of an existing production line, said one Navy official who was not briefed on the latest memo.
(Reporting by Andrea Shalal; Editing by Ken Wills)