Boeing 787 Order Flow Continues - Analyst Blog

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The Boeing Co. ( BA ) has won a sizable firm order form a joint venture between Lufthansa and Turkish Airlines - SunExpress - for a total of 40 Boeing jets, worth $3.8 billion at list prices.

The contract includes the delivery of 25 Next Generation 737-800 and 15 737 MAX 8 jets, with SunExpress having an option to buy additional 10 737 MAX 8 aircraft. The jets - slated for delivery between 2015 and 2021 - are essential to perk up route services from Germany to several destinations in Turkey.

SunExpress operates an all-Boeing fleet of over 60 Next-Generation 737-700s and 737-800s. It serves more than 90 destinations across Europe, the Middle East and North Africa.

The fourth generation of the 737 family - the 737 Max - is a premier aircraft from Boeing's stable and sees brisk demand in the single-aisle market for its fuel efficiency and low carbon dioxide emissions. Powered by the Commercial Fan Motor (CFM) International LEAP-1B engines, the Advanced Technology winglet of this airplane also enhances performance.

Additionally, the pivoting overhead stowage bins increase cabin space. The bins give passengers more room to keep a carry-on roll-aboard near their own seat besides providing extra leg space. This aircraft is 13% more fuel efficient than its closest peer in the single-aisle aircraft market.

Again, the Next Generation 737-800 version comes in with the new Boeing Sky Interior which is the latest in a series of enhancements for both airlines and passengers. This variant has been Boeing's bestseller in the single-aisle market. The single-aisle fleet's share in the global market is expected to increase from 14% to 20% by 2032. This will certainly keep Boeing's cash register ringing in the future.

Recently, Boeing received an order to supply 16 737 MAX airplanes to IcelandAir. The initial order for 12 aircraft received in Dec 2012 has been increased to 16. The agreement also includes purchase rights for eight more 737 MAXs. The total value of the 16 airplanes will be $1.6 billion at list prices.

In Jan 2014, the company also won a contract, valued at $3.9 billion at list prices, from GE Capital Aviation Services ("GECAS"), the commercial aircraft leasing and financing unit of General Electric Company ( GE ). This big order consists of 40 medium-haul passenger jets, evenly split between the two models, the 737 MAX 8 and the Next-Generation 737-800.

Indeed, this commercial aerospace behemoth - Boeing - is flying high on the back of rising demand for its new fuel-efficient commercial planes. It reported record jet deliveries in 2013, beating its own projection, driven by strong commercial numbers. The heightened deliveries were also a function of an increased production rate.

Boeing currently has a Zacks Rank # 3 (Hold). Some better-ranked stocks in the aerospace and defense industry include Zacks Ranked #1 (Strong Buy) Northrop Grumman Corp. ( NOC ) and Zacks Ranked #2 (Buy) Lockheed Martin Corp. ( LMT ).



BOEING CO (BA): Free Stock Analysis Report

GENL ELECTRIC (GE): Free Stock Analysis Report

LOCKHEED MARTIN (LMT): Free Stock Analysis Report

NORTHROP GRUMMN (NOC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BA , GE , LMT , NOC

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