The aerospace giant
The Boeing Company
) won a sizeable contract on the first day of the Dubai Airshow
on Sunday, sealing an approximately $25.2 billion deal at list
prices with Etihad Airways for its revamped 777 long-haul jet.
Etihad has placed firm orders for 56 Boeing aircraft and the
option to buy an additional 26. The Abu Dhabi carrier will be the
launch customer of this 777X airplane and intends to buy both
versions of the 777X, comprising 17 777-9X and 8 777-8X.
The Boeing 777-9X variant holds around 400 seats and is
considered as the largest and most efficient twin-engine
commercial jet in the world. The jet's fuel consumption is cut by
as much as 12% and has 10% lower operating costs. This jet is
expected to be the primary 777 version with deliveries starting
from 2020. On the other hand, the 777-8X variation will be the
most flexible commercial jet in the world and has a higher range
capability than the existing 777.
The order also takes into consideration a further 30 787-10
Dreamliners, which will make Etihad the largest operator of that
aircraft. Etihad Airways will now have a total of 71 787s on
order and Boeing plans to start deliveries of these jets in 2018.
Plagued by a number of technical issues in recent times, this
787-10 contract would be a confidence booster for Boeing. This
airplane is the third and longest member of the 787 family with
higher passenger and cargo capacity. Moreover, this jetliner is
expected to be 25% more efficient than airplanes of its size at
Apart from the launch of Boeing's latest incarnation of the 777
long-haul jet, the aerospace behemoth netted approximately $100
billion in orders at the Dubai Airshow on Sunday with three
Middle Eastern airlines signing up to buy 225 of Boeing's new
777X jets. In fact, Boeing's total order value was twice that of
its European rival Airbus, which captured 142 orders worth about
Of the major Gulf Arab carriers, apart from Etihad, Dubai-based
Emirates Airline put orders for 150 of the planned Boeing 777X at
a combined price tag of $55.6 billion. Boeing also received
orders for 50 777X from Qatar Airways in a deal valued at $19
billion at list prices. Further, Flydubai, a budget carrier,
committed to buy up to 111 Boeing single-aisle 737 aircraft.
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 the 3.6 billion mark in 2016, expanding
5.3% per annum in the period 2012 to 2016.
This is amply reflected in Boeing's swelling order book. The
company was able to secure net bookings of 805 airplanes in 2011,
which jumped to 1,203 airplanes in 2012. Fresh bookings continue
to come in this year. Boeing won net orders for 200 planes in the
Sep 2013 quarter. Backlog at third quarter 2013 end remained
strong with more than 4,800 airplanes valued at a record $345
Despite the many technical glitches plaguing the much-hyped
Dreamliner, the company remains well on track with its robust
backlog and deliveries. Again, sequestration and budget cuts
notwithstanding, its defense segment also maintained a solid
performance and fetched $7 billion in fresh new orders during the
third quarter. Apart from the commercial airspace, Boeing is also
one of the leading players in the U.S. defense sector.
Boeing currently holds a Zacks Rank #2 (Buy). One can also
Lockheed Martin Corp.
Huntington Ingalls Industries, Inc.
General Dynamics Corp.
) as good buying opportunities. These defense operators -holding
a comparable Zacks Rank #2 (Buy) - have solid growth stories with
the potential to rise significantly from current levels.
BOEING CO (BA): Free Stock Analysis Report
GENL DYNAMICS (GD): Free Stock Analysis
HUNTINGTON INGL (HII): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
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