The Boeing Company
) has clinched a deal with Qatar Airways for nine Boeing
777-300ER (Extended Range) airplanes. The deal has a total value
of $2.8 billion at list prices and includes a firm order for two
777-300ERs and options for seven more. The planes are scheduled
to be delivered to the Doha-based carrier from early next year.
With this contract, Qatar Airways will have 51 Boeing 777s in its
fleet including those on order. Presently, the airline operates
35 Boeing passenger and cargo 777s of various types, comprising
22 777-300ERs, 9 777-200LR or Longer Range airplanes and 4 777
Freighters. The two firm airplane order from Qatar Airways will
bring the backlog to 9 Boeing 777s. With the seven more becoming
firm, the backlog will rise to 16.
Again, Boeing has won a significant contract for the upgrade of
four French E-3F Airborne Warning and Control System ("AWACS")
aircraft. The contract is valued at $354 million.
The transformation involves electrical, mechanical and structural
systems of the aircraft and aircraft mission hardware and marks
the biggest ever for the French AWACS. Boeing is responsible for
on-site engineering, quality assurance support, software and
hardware. The work will be performed by a subcontractor, Air
France Industries. It has already started working on the first
aircraft with completion likely by next year. However, work on
the other planes is slated for completion by 2016.
The company highlighted that this work will be primarily based on
the U.S. AWACS Block 40/45 system and will considerably boost the
reliability and effectiveness of the aircraft while reducing
Meanwhile, the commercial aircraft manufacturer received a
commitment from the aircraft leasing unit of
General Electric Company
) − GE Capital Aviation Services/GECAS − for 10 787-10X
Dreamliners. The order is subject to the launch of the extended
variant of the aircraft and GECAS intends to take the aircraft
between 2019 and 2021 with GEnx engines. This 787-10 version of
the Dreamliner is designed to compete against the Airbus A350
which made its maiden flight recently.
The GEnx-1B engine is considered to be the best-selling engine on
the Boeing 787 Dreamliner. The engine has already run more than
60,000 flight hours and more than 14,000 cycles since its launch
Headquartered in Chicago, Boeing is a premier jet aircraft
manufacturer and one of the largest defense contractors in the
U.S. Its revenue exposure is spread across more than 90 countries
around the globe.
With the gradual recovery in the global economy, we believe
freight and passenger traffic will improve going forward. Also,
the U.S. defense budget is skewed towards a number of prominent
However, in the defense business, the adverse effects of
sequestration cannot be ignored. In fact, in April, the budget
cuts from sequestration have reduced the number of contracts
awarded by the Department of Defense to major defense
contractors. Defense contractors, including Boeing, have not been
spared from the negative impacts of sequestration.
Boeing presently retains a Zacks Rank #3 (Hold). Other companies
in the industry which are worth considering are Zacks Ranked #1
Erickson Air-Crane Inc.
) and Zacks Ranked #2 (Buy)
Wesco Aircraft Holdings, Inc.
BOEING CO (BA): Free Stock Analysis Report
ERICKSON AIR-CR (EAC): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis
WESCO AIRCRAFT (WAIR): Free Stock Analysis
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