Aerospace giant, The Boeing Co. (BA) declared that Kuwait Airways has agreed to purchase 10 widebody 777-300ER (extended range) aircraft, valued at $3.3 billion at the current list prices.
Delivery of the Boeing 777-300ER aircraft is slated to begin in Nov, 2016.
Boeing’s 777-300ER is one of the most preferred long-haul carriers. Emirates Airline’s fleet of jets comprises the Boeing’s 777-300ER which is considered to be its backbone. Etihad Airways and Qatar Airways also have a significant number of 777-300ER aircraft in their fleet.
Boeing reported delivery of 27 units of 777 jets in the third quarter of 2014 and expects Commercial Airplanes’ delivery in total between 715–725 units in 2014. Boeing remains optimistic as it expects air freight traffic to nearly double by 2033, boosting the demand of its commercial airplanes, leading to top-line growth.
Moreover, with Middle Eastern Airlines focusing on revamping and expanding their fleet, Boeing is eyeing to win more deals. Boeing had received orders for 225 units of its 777 fleet from Emirates Airline, Etihad Airways and Qatar Airways in 2013.
However, Boeing continues to face stiff competition from Airbus, the European aircraft manufacturer.
The news of Kuwait Airways’ intention of purchasing Boeing’s 777-300ER jet comes on the heels of the aerospace company losing out to its arch-rival Airbus on a $14 billion Delta order. Delta Air Lines, Inc. (DAL) has given an order for 50 dual-aisle wide-body jets to Airbus which includes 25 A350-900s and 25 A330-900neos.
Delta Air Lines was looking for a replacement for its Boeing 747-400s and 767-300s and Boeing being unable to make an early delivery of its 787 fleet, the deal went to Airbus.
Boeing has been struggling to manage the supply chain of its 787 jets effectively, leading to program delays. The Dreamliner was marred by glitches from the very beginning. Although the aerospace giant tried ironing out wrinkles from its troubled 787 Dreamliner, it seems that for every effort, a new problem pops out.
Despite program delays and peer competition, Boeing continues to deliver strong performance. It delivered upbeat performance in third-quarter 2014, registering 18.9% increase in its earnings from the year-ago quarter. The top line also rose an impressive 7.5% on a year-over-year basis.
Boeing also reported strong deliveries in the third-quarter of 2014. The company delivered 186 commercial airplanes, about 9.4% higher than the year-ago figure. It also raised its full-year core earnings forecast for the third time, thanks to the booming commercial aircraft demand.
Boeing currently holds a Zacks Rank #2 (Buy). Other equally well-placed stocks in the same industry include Engility Holdings, Inc. (EGL) and General Dynamics Corp. (GD).
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