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Boeing (BA) Wins Order From Lufthansa for up to 100 737 MAX
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The Boeing Company (BA - Free Report) recently announced that it has received a landmark order for delivering up to 100 units of its 737 Max jets from Lufthansa Group. Boeing has committed to 40 737-8 airplanes with an option for 60 more.
Boeing has received an order for single-aisle planes from Lufthansa for the first time in nearly three decades.
Significance of 737 MAX Jets
The 737 MAX caters to the single-aisle market with enhanced efficiency, improved environmental performance and increased passenger comfort. In particular, Boeing’s 737-8 MAX reduces fuel use and emissions by 20% while producing a 50% smaller noise footprint than the airplanes it replaces. The jets also offer increased comfort and relaxation for passengers, with modern technologies, greater space and larger pivoting overhead storage bins.
Such remarkable features must have bolstered demand for this jet family over the past few years. Coming to the recent achievements, in December 2023, Boeing received an order for 40 737-8 airplanes from Avolon, and in November 2023, BA received orders for 20 737-8 from Ethiopian Airlines and seven 737-8 from SCAT Airlines.
Revenues earned from these deliveries, including the latest deal for 40 jets, will significantly bolster Boeing’s commercial unit’s top line, which witnessed a solid 25% year-over-year improvement in the last reported quarter.
Boeing’s Prospects in the European Market
As we continue to witness a steady recovery in the aviation industry over the past few months, the European region has seen an upward growth trend. To this end, per a report by Mordor Intelligence, the European commercial aircraft market is expected to register a CAGR of over 9.65% during the 2023-2028 period.
Such solid market growth prospects should aid Boeing, one of the biggest jet manufacturers in the world. Impressively, it delivered 5,400 commercial aircraft to more than 130 European customers in the last 60 years. Such developments, along with the company’s latest agreement with Lufthansa, should increase Boeing’s profitability in the coming days.
Notably, Germany-based Lufthansa Group has been a much-valued customer for Boeing’s commercial jets. It took delivery of the first 146 737s in 1967, with final delivery in 1995. After that, Lufthansa’s fleet consisted of Boeing’s wide-body aircraft. The current backlog stands at 34 787 Dreamliners, seven 777-8 Freighters and 20 777-9 airplanes.
Opportunities for Peers
Apart from Boeing, aircraft manufacturers that have a solid presence in the European aviation industry and thus may gain from the flourishing market prospects are as follows:
Embraer (ERJ - Free Report) : The company has a huge portfolio of commercial jets, with a prominent presence in the European market. On Oct 11, 2023, Luxemburg-based Luxair placed an order for four E195-E2s, with two options and three purchase rights for more aircraft.
ERJ boasts a long-term earnings growth rate of 17%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 21.3% from the 2022 reported figure.
Airbus (EADSY - Free Report) : The company has a strong presence in Europe, with Germany being one of the largest markets. In December 2023, Airbus delivered Transavia Airlines’ first A321neo and received an order from Lufthansa Airlines for 40 A220-300s. The Lufthansa Group, the largest airline customer, took delivery of the 600th aircraft from Airbus in 2023.
EADSY boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 12.9% from the 2022 reported figure.
Textron (TXT - Free Report) : Its Textron Aviation business segment’s principal market includes general aviation aircraft, business jets and commercial transportation. In October 2023, the company announced its agreement with Hahn Air, which is set to become the European launch customer for TXT’s Cessna Citation CJ3 Gen2. The aircraft is expected to be delivered in 2026.
TXT boasts a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 6.4% from the 2022 reported figure.
Price Performance
In the past year, shares of BA have rallied 34.4% against the industry’s 9.1% decline.
Image: Shutterstock
Boeing (BA) Wins Order From Lufthansa for up to 100 737 MAX
The Boeing Company (BA - Free Report) recently announced that it has received a landmark order for delivering up to 100 units of its 737 Max jets from Lufthansa Group. Boeing has committed to 40 737-8 airplanes with an option for 60 more.
Boeing has received an order for single-aisle planes from Lufthansa for the first time in nearly three decades.
Significance of 737 MAX Jets
The 737 MAX caters to the single-aisle market with enhanced efficiency, improved environmental performance and increased passenger comfort. In particular, Boeing’s 737-8 MAX reduces fuel use and emissions by 20% while producing a 50% smaller noise footprint than the airplanes it replaces. The jets also offer increased comfort and relaxation for passengers, with modern technologies, greater space and larger pivoting overhead storage bins.
Such remarkable features must have bolstered demand for this jet family over the past few years. Coming to the recent achievements, in December 2023, Boeing received an order for 40 737-8 airplanes from Avolon, and in November 2023, BA received orders for 20 737-8 from Ethiopian Airlines and seven 737-8 from SCAT Airlines.
Revenues earned from these deliveries, including the latest deal for 40 jets, will significantly bolster Boeing’s commercial unit’s top line, which witnessed a solid 25% year-over-year improvement in the last reported quarter.
Boeing’s Prospects in the European Market
As we continue to witness a steady recovery in the aviation industry over the past few months, the European region has seen an upward growth trend. To this end, per a report by Mordor Intelligence, the European commercial aircraft market is expected to register a CAGR of over 9.65% during the 2023-2028 period.
Such solid market growth prospects should aid Boeing, one of the biggest jet manufacturers in the world. Impressively, it delivered 5,400 commercial aircraft to more than 130 European customers in the last 60 years. Such developments, along with the company’s latest agreement with Lufthansa, should increase Boeing’s profitability in the coming days.
Notably, Germany-based Lufthansa Group has been a much-valued customer for Boeing’s commercial jets. It took delivery of the first 146 737s in 1967, with final delivery in 1995. After that, Lufthansa’s fleet consisted of Boeing’s wide-body aircraft. The current backlog stands at 34 787 Dreamliners, seven 777-8 Freighters and 20 777-9 airplanes.
Opportunities for Peers
Apart from Boeing, aircraft manufacturers that have a solid presence in the European aviation industry and thus may gain from the flourishing market prospects are as follows:
Embraer (ERJ - Free Report) : The company has a huge portfolio of commercial jets, with a prominent presence in the European market. On Oct 11, 2023, Luxemburg-based Luxair placed an order for four E195-E2s, with two options and three purchase rights for more aircraft.
ERJ boasts a long-term earnings growth rate of 17%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 21.3% from the 2022 reported figure.
Airbus (EADSY - Free Report) : The company has a strong presence in Europe, with Germany being one of the largest markets. In December 2023, Airbus delivered Transavia Airlines’ first A321neo and received an order from Lufthansa Airlines for 40 A220-300s. The Lufthansa Group, the largest airline customer, took delivery of the 600th aircraft from Airbus in 2023.
EADSY boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 12.9% from the 2022 reported figure.
Textron (TXT - Free Report) : Its Textron Aviation business segment’s principal market includes general aviation aircraft, business jets and commercial transportation. In October 2023, the company announced its agreement with Hahn Air, which is set to become the European launch customer for TXT’s Cessna Citation CJ3 Gen2. The aircraft is expected to be delivered in 2026.
TXT boasts a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 6.4% from the 2022 reported figure.
Price Performance
In the past year, shares of BA have rallied 34.4% against the industry’s 9.1% decline.
Image Source: Zacks Investment Research
Zacks Rank
Boeing currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.