As per a media report, international aerospace giant
The Boeing Co.
) is in talks with Indonesia based Lion Air for 10 '787
Dreamliners. The potential value of the deal is estimated at $2
Boeing has a long relationship with Lion Air. The Indonesian
carrier has till date primarily ordered for the 737 model for its
fleet. Besides, the airliner was the launch customer for 737-900
Extended Range (ER) in June 2005 with an order for 30 airplanes. Up
to now Lion Air has placed orders for 408 airplanes from the 737
We believe Lion Air's decision to migrate from its favored 737
variant to the 787 model is due to 787's capability to fly a longer
distance and carry more passengers. The international commercial
airline market holds a lot of potential in the future. The airline
operators are gearing up to meet the increasing demand for air
Lion Air is also in talks with Boeing's arch rival Airbus for
new commercial airplanes. However, 787 Dreamliners' far improved
capabilities and Lion Air's long standing relationship with Boeing
might tilt the order in the company's favor.
Gross orders received by Boeing for its 787 variant till May 22,
2012 were 19 airplanes while cancellation during the period climbed
to 25 airplanes, taking the net order number to a negative 6.
We believe that if the company can secure the 787 order from Lion
Air, the order book for 787 for the year will turn positive.
787 Dreamliner sales form an integral part of Boeing's
commercial aircraft success. The company targets to deliver 35 to
42 '787 airplanes to its customers in 2012. In the first four
months of the year Boeing has delivered 8 '787 airplanes.
The Boeing 737 model has consistently grabbed orders and if the
company can sort out the problem relating to the timely delivery of
787 aircrafts it can easily achieve its $47.5 billion to $49.5
billion projected revenue target for commercial airplanes in
Chicago-based Boeing Co. has a Zacks #3 Rank (short-term Hold
rating). The company competes with the likes of
General Dynamics Corp.
Lockheed Martin Corporation
Northrop Grumman Corporation
) in various niches.
BOEING CO (BA): Free Stock Analysis Report
GENL DYNAMICS (GD): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
To read this article on Zacks.com click here.