The Boeing Company BA once again reported industry-leading orders in 2015. The aerospace major recently received orders for 166 jets, bringing its net orders for 2015 to 743 passenger jets as of Dec 22.
The new orders include planes only from the 737 family of single-aisle, narrow-body jets. It includes orders for 20 planes from Delta Air Lines, 3 planes from Jet2.com and 143 orders from unidentified customers. Recently, Boeing announced an agreement with China Southern Airlines Co. Ltd. ZNH for 50 737s and 60 new 737 MAX jets, including 30 new planes for a China Southern subsidiary, Xiamen Airlines. Boeing said that orders would be added to the order book once they are confirmed.
Further, Boeing is on track to deliver 750 to 755 new planes in 2015 and achieve a book-to-bill ratio of 1 for the year. Through November, the company delivered 709 commercial planes in 2015, including the delivery of 71 jets in November alone. Also, the company delivered 457 737 jets during that period.
Boeing had reported record deliveries in 2014 and retained its position as the world’s biggest airplane maker. The company had delivered a total of 723 new commercial planes. This year, we expect it to break its own record.
Per the company’s report, the commercial fleet is expected to double over the next two decades to 43,560 airplanes fueled by sustained 4.9% annual growth in commercial passenger traffic. About 40% of the total commercial demand is likely to come from the Asian markets, another 40% from Europe and North America, and the balance from the rest of the world. We believe that the surging global airplane demand is strong enough to accommodate not only Boeing and Airbus Group SE EADSY, but also the Brazilian aerospace conglomerate, Embraer SA ERJ.
Single-aisle narrow body jets like the Next-Generation 737-800 and the new 737 MAX 8 will account for 26,730 jets, worth $2.7 trillion, in the next 20 years, comprising 70% of the total units forecast. Single-aisle jets are the focus of the hype surrounding Boeing. This aerospace behemoth is also set to grab a major share of future orders with its high-quality 737 planes.
To date, Boeing has received 13,038 orders for the 737 jets, which stands proof of its high quality and superior performance.
Boeing exited the third quarter with a backlog of 5700 commercial aircraft amounting $426 billion, which shows wide acceptance of the commercial aircraft and the willingness of customers to wait to add the desired model to their fleet.
For Boeing, the title of the world's largest airplane manufacturer maybe attributed to its impressive track record in both innovation and fuel efficiency. We expect the company to continue to notch up record jet deliveries in the future on the back of growing passenger traffic in Asia-Pacific.
Currently, Boeing has a Zacks Rank #3 (Hold).
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