A release from aerospace major
The Boeing Company
) projects the Asia-Pacific region to be the latest hunting
ground for commercial aircraft manufacturers. The surge in middle
class population and the growing demand for cheap flying options
are expected to drive the commercial aircraft industry in this
The study revealed that Asia-Pacific will require 12,820
airplanes worth $1.9 trillion in the next two decades. The
deliveries will account for a sizeable 36% of the global
commercial airplane delivery in the aforesaid period. These
deliveries will triple the size of the Asia-Pacific aircraft
fleet by 2032 from 2012 levels.
Not surprisingly, Boeing is likely to be a major beneficiary of
this demand explosion, as nearly 69% of the new additions will be
in the single-aisle market. The emphasis being on swift, low-cost
travel, Boeing with its fuel efficient single-aisle airplanes
like the Next-Gen 737 and the 737 MAX will definitely secure a
good many of these potential orders.
Twin-aisle airplanes are projected to comprise 28% of projected
Asia-Pacific deliveries. Boeing with its 747-8 Intercontinental,
777 and the 787 Dreamliner also looks good to snap up more orders
in this segment.
Boeing's ongoing investment in research and development enables
it to churn out more fuel efficient and passenger friendly
aircraft. The unveiling of its new 787-10 model at the Paris Air
Show last year grabbed attention and order bookings to boot.
Boeing Commercial Airplanes (BCA) has lately been driving the
company's growth engine. The strong backlog of orders at Boeing
is a testament to that fact. Boeing exited 2013 with a backlog of
5,080 airplanes valued at a record $374 billion.
Given its impressive track record of both innovation and fuel
efficiency, we expect Boeing to come out with newer variants of
single-aisle as well as twin-aisle aircraft, keeping it a step
ahead of its competitors.
The future of BCA looks bright given its robust backlog and the
expected boom in the commercial airplane market in Asia-Pacific.
We believe the contribution coming in from this division could
allow the company to offset any slackness in orders from its
Boeing currently has a Zacks Rank # 3 (Hold). Some better-ranked
stocks in the aerospace and defense industry include
Alliant Techsystems Inc.
Northrop Grumman Corporation
Lockheed Martin Corporation
). While Alliant Techsystems and Northrop Grumman carry a Zacks
Rank #1 (Strong Buy), Lockheed holds a Zacks Rank #2 (Buy).
ALLIANT TECHSYS (ATK): Free Stock Analysis
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
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