Boeing Co on Monday welcomed the chance to upgrade the U.S. Army's 95 remaining A-model Apache AH-64 attack helicopters, noting its Apache deliveries had been on time and within budget for the past 10 years.

Brig. Gen. Stephen Mundt last week told reporters that the Army initially planned to buy new Apache Block 3 helicopters at a cost of about $32 million each starting in 2011.

But upgrades to older Apaches priced at about $14 million each would be needed in the meantime given combat losses and an expected two-year delay in the fielding of the new Textron Inc Armed Reconnaissance Helicopter.

Mike Burke, Boeing's director of Army rotorcraft business development, told Reuters that the Army had expressed interest in replacing the engines and other equipment of its oldest Apache models for some time, but this was the first concrete sign that such a program would go forward.

That would be welcome news for Boeing, Burke said, although he said Mundt's cost estimate included government-furnished equipment and did not reflect the potential value of the contract to Boeing.

Boeing has already delivered 501 upgraded Apaches to the Army. The service has contracts or options for 96 additional aircraft, and recently asked for proposals for 24 more.

As part of those deals, the Army and Boeing are now hammering out details for a batch of 36 helicopters under a contract that will be awarded next month, to be followed by another contract for 24 in November 2008, said Gary Bishop, director of Boeing's Apache program.

Contracts for work on the Army's remaining 95 A-model Apaches would probably not be awarded until the next five-year budget cycle, which begins in 2010, Boeing officials said.

Burke said Boeing has sold the Apache helicopter, used heavily in Iraq and Afghanistan, to 10 foreign countries and many of those also want to upgrade their aircraft.

Boeing expects to finalize a contract by the end of the year with Saudi Arabia to upgrade its 12 Apache helicopters and South Korea is expected to launch a competition in the next year and a half, Burke said.

India has also launched a helicopter competition and plans to issue a request for proposals by month's end, he said.

The Apache helicopter remains the premier attack helicopter in the world 20 years after it debuted, thanks to the continued upgrade of its onboard electronics, said defense analyst Loren Thompson of the Lexington Institute.

Although the helicopter still looks the same as it did a decade ago, in fact, it's about 10 times more effective than it used to be, he said, noting the Apache was the most lethal aircraft on a battlefield, aside from a fighter jet.