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Boeing (BA) Inks Order for 787-9 Dreamliners From Riyadh Air

The Boeing CompanyBA recently inked an order for 787-9 Dreamliners from the new Saudi Arabian airline, Riyadh Air. Per the deal, the company will supply 39 787-9s to Riyadh Air with an option to supply 33 more later.

Riyadh Air, which is owned by Saudi Arabia's Public Investment Fund, is the country’s new national airline in its capital city, Riyadh. The nation strives to transform into a global aviation hub and thus announced the intent to buy nearly 121 787 Dreamliners from Boeing. This marks Boeing’s fifth largest order based on the value in the commercial line of business.

With this order, Boeing strengthens its eight decades of long-standing relationship with the nation’s aviation sector. It also opens avenues for more orders for the company in the long term, thus giving an opportunity to expand and capitalize on the growing aviation sector of the economy.

Importance of 787-9 Dreamliner

The 787-9 provides the longest range of the 787 family of airplanes, flying approximately 300 passengers and 7,565 nautical miles, with additional cargo capacity. The airplanes boast features that offer a better experience and greater comfort for passengers. It is equipped with technology that senses and counters turbulence for a smoother ride.

The 787 family of airplanes is beneficial to the environment and the airlines as it delivers unmatched fuel efficiency, thus reducing fuel use and emissions by 25% compared with the airplanes they replace. Considering the environmental regulations, the demand for such environmental-friendly aircraft is likely to increase manifold.

Buoyed by such remarkable features, Boeing may continue to witness an inflow of orders for its 787 family of aircraft, like the latest one. This is likely to bolster its revenue generation prospects.

Growth Prospects

Considering the current rise in demand for air travel, commercial aircraft demand is projected to witness a solid rally in the days ahead. Other factors like increasing globalization, in which companies strive to expand their footprint globally, are fueling the need to travel more, thus driving the demand for commercial air travel.

Per the GlobeNewswire projection, the global commercial aircraft market is expected to grow at a CAGR of 12.3% over the 2021-2026 period. Such expanding size of the market is likely to benefit companies like Boeing that enjoy an established position in the commercial aircraft market.

Other companies that have a strong footing in the commercial aircraft market and can enjoy the perks of the expanding market size are:

Airbus’ EADSY diverse product line includes everything from passenger aircraft to freighters and private jets. Some of its commercial aircraft includes the A320 Family, the A220 Family, A330 Family, etc.

Airbus boasts a long-term earnings growth rate of 12.4%. Shares of EADSY have increased 15.4% in the past year.

Embraer ERJ also enjoys a leading position in the commercial aircraft arena. Its product portfolio includes E-Jets E2, E170, E175, E190, E195, etc.

Embraer has a long-term earnings growth rate of 17%. ERJ shares have increased 40.2% in the past year.

Textron’s TXT provides airborne solutions for government, military and commercial customers. Its product portfolio includes Cessna, Beechcraft, etc.

Textron’s long-term earnings growth rate is 11.2%. Shares of TXT have increased 8.5% in the past six months.

Price Performance

Shares of Boeing have soared 13% in the past year as against the industry’s fall of 13.8%.

Zacks Investment Research
Zacks Investment Research


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Zacks Rank

The company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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