The Boeing Co. (BA) announced that Garuda Indonesia, the country’s flag-carrier airline, placed an order for 50 jets, worth $4.9 billion at list prices.
Specifically, Garuda Indonesia will purchase 46 737 MAX 8s and will convert existing orders for four Next-Generation 737-800s to 737 MAX 8s. First delivery of the 737 MAX is scheduled for 2017.
Garuda Indonesia is in an expansionary mode with the carrier planning to add up to 250 aircraft by 2025 to double its fleet and meet demand in one of the world's fastest-growing aviation markets. Garuda Indonesia currently operates 77 Boeing 737s.
The unprecedented rise in passenger traffic in the Asia-Pacific region is bringing in a steady flow of orders. The 737-family of airplanes is witnessing a sharp rise in demand in the commercial aircraft market, primarily in China, India, the Middle East and Africa, and other emerging countries due to the growing popularity of the low-cost carrier business. In addition, higher fuel efficiency and lower operating costs as compared to other models have made the 737 aircraft very popular. Boeing said that it has orders for 2,295 MAX jets from 47 customers worldwide.
The fourth generation of the 737 family – the 737 Max – is powered by Commercial Fan Motor (CFM) International LEAP-1B engines while the Advanced Technology winglet of this airplane enhances performance.
Additionally, the pivoting overhead stowage bins increase cabin space. The bins give passengers more room to keep a carry-on roll-aboard near their own seat besides providing extra leg space. This aircraft is 14% more fuel efficient than its closest peer in the single-aisle aircraft market.
The world’s leading commercial aircraft maker – Boeing − upped its 20-year forecast for jetliner demand on Jul 2014 on the back of promising travel in Asia and the increasing need for airlines to boost their fuel-efficient, single-aisle fleet.
Per its bullish outlook, the world will need 36,770 new planes worth $5.2 trillion between 2014 and 2033, which is a 4.2% jump from last year's forecast. Of the total units, 42% of all new deliveries will replace older, less efficient airplanes. The outlook mainly reflects rising demand from fast-growing emerging areas of the Asia-Pacific, mainly for single-aisle jets like the Next-Generation 737-800 and the new 737 MAX 8, which will comprise 70% of the total units in the forecast (read: Boeing Sees Jetliner Market Surging to $5.2 Trillion).
This Chicago based premier jet aircraft manufacturer recently reported strong delivery numbers for the third quarter. In its third quarter of 2014, Boeing delivered 186 commercial airplanes, approximately 9.4% higher than the year-ago figure.
The company also announced that it will boost 737 output to 52 airplanes per month in 2018, up from the existing 42 and from a planned level of 48 in 2017. This will mark yet another new production record for any jet in history, with an annual rate of 624 737s per year.
Currently, Boeing has a Zacks Rank #2 (Buy). Other well-placed players in the aerospace and defense industry include Air Industries Group (AIRI), Arotech Corporation (ARTX) and General Dynamics Corp. (GD). While Air Industries and Arotech sport a Zacks Rank #1, General Dynamics has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment