Aerospace and defense giant The Boeing Company (BA) announced that it has inked a deal with China Southern Airlines, one of China’s major air carriers, to supply six Boeing 777 freighters. The six aircraft, to be delivered between 2013 and 2015, carry a listed price of $1.58 billion. China Southern Airlines will fund the purchase from bank loans and operating fund.
Launched in 2005, the B777F is the world’s longest-range twin-engine freighter, according to Boeing. It has a revenue payload capacity of more than 226,000 pounds (102.8 metric tons) and it can fly 4,880 nautical miles (9,038 kilometers) with a full payload.
The deal is the second major purchase of this month by China Southern from the US aircraft giant. Three weeks ago, the Chinese firm announced that its Xiamen Airlines unit would buy six 787 Dreamliners from Boeing, worth around $1.1 billion at listed prices, as Chinese airlines boost their fleets to meet fast-growing travel demand.
The aircraft are due to be delivered between 2014 and 2015, and will boost Xiamen Airlines’ fleet, which already stands at 71 Boeing jets serving 150 domestic and regional routes. China Southern Airlines owns 60% of Xiamen Airlines.
Boeing expects its Commercial Airplanes segment to generate revenue in the range of $36–$38 billion in 2011 and deliveries to range from 485–500 airplanes, including first delivery of 787 and 747-8 airplanes.
The 787 program got delayed for a number of reasons, from the hold-up in availability of engines to faulty parts supplied by vendors. Keeping all these delays behind, the company now looks forward to delivering its first airplane to All Nippon Airways in August to September.
The Boeing Company currently retains a Zacks #3 Rank (short-term Hold rating). We have a long-term Neutral recommendation on the stock. The company competes with the likes of General Dynamics Corporation (GD), Lockheed Martin Corporation (LMT) and Northrop Grumman Corporation (NOC).
Based in Chicago, The Boeing Company designs and produces commercial airplanes, defense systems, and civil and defense space systems.
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