Orders Pour in for Boeing Aircrafts - Analyst Blog


The Paris Show has brought in big orders for The Boeing Company ( BA ). With the launch of the 787-10 version of its flagship Dreamliner aircraft, the company has in total received 102 firm orders for this version from five different airlines worth $30 billion.

United Continental Holdings, Inc. ( UAL ) became the launch customer with 20 firm orders. These include 10 new orders while the remaining 10 comprise conversion orders from the 787-9 model. We note that the first flight for 787-9 is slated for late 2013.

The company received 30 orders each from Singapore Airlines and Air Lease Corporation ( AL ), 12 orders from British Airways, and 10 orders from GE Capital Aviation Services, a subsidiary of General Electric Company ( GE ).

Boeing indicated that it has begun designing the plane and expects final assembly and flight test to begin in 2017. First delivery is scheduled for 2018.

This version of the Dreamliner is 15% larger in capacity compared to 787-8 and 787-9 (yet to be launched) and has a carrying capacity of up to 330 passengers. With the same fuel-efficient carbon-composite materials, the 787-10 can fly up to 7,000 nautical miles. Also, the aircraft is 25% more fuel efficient compared to its predecessors.

The second day of the Paris show brought in more orders for fuel efficient passenger jets, including single-aisled as well as wide-bodied jets. Other orders for Boeing include 3 firm orders from Air Lease Corp. for 787-9, 2 firm orders from Qatar Airways for 777-300 extended range ("ER"), 4 commitments from SkyMark Airlines for 737 MAX and 7 commitments from Qatar Airways for 777-3000 ER.  

These multi-billion dollar orders would act as a catalyst to growth. Despite the battery issue related to 787-8 that resulted in the grounding of the aircraft, Boeing is flooded with orders because of the sheer fact that its aircrafts are more fuel efficient. This not only reduces cost per mile but also cuts pollution levels. Moreover, these aircrafts are right-sized for many long-haul markets. Going forward, with new plane program announcements, we expect the company to receive more and more orders.

However, like other major defense contractors, the company continues to face the adverse effects of sequestration and domestic budget cuts. The company presently retains a short-term Zacks Rank #3 (Hold).

AIR LEASE CORP (AL): Free Stock Analysis Report

BOEING CO (BA): Free Stock Analysis Report

GENL ELECTRIC (GE): Free Stock Analysis Report

UNITED CONT HLD (UAL): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AL , BA , GE , UAL



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