Boeing ( BA ) reported a record backlog of orders for commercial jets Tuesday, with China and the overall Asia-Pacific market looming as bigger growth drivers.
[ibd-display-video id=2326967 width=50 float=left autostart=true] In the past three years, one out of four airplanes Boeing makes, including one in three 787 Dreamliners, was delivered to customers in China, Randy Tinseth, Boeing's VP of marketing, told reporters during a call Tuesday.
"It's a market that is underserved by any calculation and we're not talking about a couple - but hundreds of airplanes," he said.
He said China is the largest market for widebody 787s, noting that 20% all Dreamliner flights are to, from or around China.
And 40% of Boeing's record 5,864 airplane backlog, which represents about seven years of production, is for customers in the Asia-Pacific region.
Meanwhile, European rival Airbus ( EADSY ) won't be outdone in the Chinese market. On Tuesday that it would boost production of its A320 in China to six jets per month from four currently.
A French official told Bloomberg that Airbus is in talks with a Chinese partner on its A380 superjumbo jet.
President Emmanuel Macron is visiting China and could announce another major order for Airbus during his trip. Last month, Aircraft Leasing Group Holdings announced plans to buy 50 A320s at a list price of $5.42 billion.
Boeing shares jumped 2.7% to 318.43, a fresh high on the stock market today . Airbus shares dipped 0.2%.
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In 2017, Boeing's commercial jet deliveries rose to 763 from 748 in 2016, as the aerospace giant ramped up production of the 737 to 47 per month and started deliveries of its new 737 MAX.
Total 737 deliveries climbed to 529 from 490 in 2016. Deliveries of the 787 Dreamliner dipped to 136 from 137.
Boeing had 912 net orders for the year, valued at $134.8 billion at list prices, from 71 customers.
But Boeing lost out to Airbus for 100 narrow-body jets from Delta Air Lines ( DAL ).
"We believe Boeing shares are still moderately undervalued, particularly if the company can sustain free cash flow margins in the 13%-15% range," Fort Pitt Capital Group founder Charles Smith said.
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