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Honeywell Inks Deal with COMAC to Design Single-Aisle Jet

Honeywell International Inc.HON recently announced that it has entered into a partnership with Commercial Aircraft Corporation of China ('Comac') to design the country's first single-aisle jet C919. The newly designed jet will be on par with The Boeing Company's BA and Airbus Group SE's aircraft, the two leading aircraft makers in the world.

This partnership is expected to be accretive to the company's financials as it presents an incremental revenue-generating opportunity worth $15 billion. The aircraft will either be certified by the Federal Aviation Administration (FAA) or the European Aviation Safety Agency (EASA) to ensure the safety of passengers.

Honeywell entered into this project in 2010, when Comac invited the latter to design four major components of the airplane. Alongside, the company has offered its assistance to provide training for Comac's C919 aircraft. Honeywell has installed the fly-by-wire software in this aircraft, which will in turn improve safety, reliability and efficiency.

In Nov 2015, when the first specimen of C919 was unveiled by the Shanghai-based company, it reportly received around 517 purchase orders from 21 customers. The C919 aircraft is expected to make a full fledged entry into the market by 2018-2020.

At present, Honeywell has around 400 orders for aircraft, most of which are in China. Honeywell has also developed, produced and designed the primary flight control system of aircraft ARJ21-700. Comac had received around 300 orders for the ARJ21-700 aircraft.

The acquisition of COM DEV International's satellite equipment business in Nov 2015 is likely to further boost the technological prowess of Honeywell's aviation segment, both in terms of driving innovation and improving the safety of passengers.

Honeywell carries a Zacks Rank #3 (Hold). Some stocks in the industry worth a glance include Barloworld Ltd. BRRAY and Macquarie Infrastructure Corporation MIC . They both carry a Zacks Rank #2 (Buy).

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


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

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