Leading plane maker The Boeing Co. (BA) received orders for three next generation 737-800 airplanes from Belarus flag carrier Belavia Airlines. The current list price of a Boeing 737-800 is $90.5 million.
737 is Boeing’s best-selling airplane. Boeing exited first quarter 2014 with a backlog of 5,100 airplanes valued at $374 billion. The majority of this backlog comprises airplanes from its extended 737 family.
The very popular single-aisle 737-800 jet, launched in Sep 1994, has received 4,659 orders to date. 737-800’s appeal lies in its ability to fly further, carry more passengers and consume lesser fuel as compared to competing models.
Belavia Airlines’ New Planes for New Routes
The 737-800 has a maximum range of 3,115 nautical miles (5,762 km). This will help Belavia Airlines to open up new routes and start non-stop flights to destinations like Tenerife, Canary Islands and Dubai.
Also, these fuel efficient airplanes will lower operational costs.
Benefits of a Non-Diverse Fleet
Belavia Airlines already uses 15 of Boeing’s 737 aircraft in its fleet. Belavia Airlines also has four airplanes from Embraer SA (ERJ).
However, the latest order for the 737-800s indicates Belavia Airlines might be planning to make its fleet as uniform as possible with 62% comprising Boeing airplanes.
Airline operators worldwide try to keep their fleet as non-diverse as possible. It helps to cut down on operating expenses and ensures better after-sales services from the manufacturers.
Per a study from Boeing, there is a huge possibility in the commercial aerospace market. The company forecasts demand for 35,280 airplanes in the 2013-2032 frame, valued at a staggering $4.8 trillion. Nearly 70% of the airplanes will be of the single aisle variety, with Boeing having a large share of this market alongside Airbus.
Boeing carries a Zacks Rank #3 (Hold). Besides having a stronghold in the commercial airplane manufacturing market, Boeing has a prominent defense presence. Investors interested in the aerospace and defense industry may consider stocks like General Dynamics Corp. (GD) and Lockheed Martin Corporation (LMT). Both these stocks carry a Zacks Rank #2 (Buy).
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