The Boeing Company
) received cumulative new orders for 27 commercial airplanes,
worth $4 billion at current list prices. The new bookings will
bring in a sigh of relief for this commercial airplane
manufacturer, as its technologically sound 787 model is still
grounded due to battery problems.
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The orders include 17 airplanes of the 737 model.
United Continental Holdings Inc.
) ordered eight 737-900ERs, Qantas ordered five aircrafts and
leasing company GECAS ordered for another four airplanes. On the
other hand, 10 big 777 airplanes have been ordered by
Air Lease Corp.
). However, orders for two 737 airplanes was cancelled by an
The 737 has a list price of $82 million to $107 million while 777
list prices range from $259 million to $315 million. We expect
the airline operators to get a discount on the list prices as
Boeing has historically offered discounts on bulk orders.
Boeing's commercial airplane revenue target for 2013 is in the
range of $51 billion to $53 billion. The steady stream of orders
received by the company so far in 2013 suggests that it is on the
right track to meet its goals. Year to date, the company has
received net orders for 191 airplanes, with the 737 model
dominating the order book with 138 airplanes.
Recently, Boeing was able to secure a billion dollar order from
Cathay Pacific Airways for three 747-8 Freighter airplanes. The
order also includes options for five additional 777 Freighters.
The gradual recovery in the global economy is bringing in a
steady improvement in passenger and freight traffic. As per the
International Air Transport Association (IATA) global airline
passengers will touch 3.6 billion in 2016, expanding 5.3% per
annum in the period 2012 to 2016.
We believe the airline operators will have to increase and/or
upgrade their fleet to cope with the projected increase in
passenger traffic. Boeing with its wide repertoire of airplane
models will stand to benefit from rising customer demand for
Apart from the commercial airspace, Boeing is also one of the
leading players in the U.S. Aerospace and Defense sector. Boeing
and its aerospace peer
Lockheed Martin Corporation
) currently retain a Zacks Rank # 2 (Buy).