The Boeing Company (BA) has received a firm order from Irish low-cost carrier Ryanair Holdings plc (RYAAY) to deliver 175 Next-Generation 737-800 airplanes at the Paris Air Show. This order, originally announced as a commitment in March, is worth $15.6 billion at list prices. This marks Boeing's largest European sale to date.
Boeing has a long-standing alliance with Ryanair and aims to meet its commitments in terms of maintaining product standard along with delivery timing. Ryanair is one of the major operators of the 737-800 airplanes, having 300 aircraft currently. The airline took delivery of its first 737-800 airplane from Boeing in 1999 and aims to boost its fleet size to more than 400 aircraft with a capacity to serve over 100 million customers across Europe every year.
The Boeing Next-Generation 737-800 airplanes came into service on Sep 5, 1994. This model continues to be a pillar of strength for Boeing in the commercial airplane sector. Steady demand for this model is primarily driven by fuel efficiency and lower operating costs as compared to other models. The single-aisle aircraft can accommodate 162-189 passengers and can fly approximately 3,000 nautical miles (3,452.3 miles).
Ryanair is also working on another order comprising about 200 Boeing 737-MAX jets. The deal is likely to be sealed within a year and has a potential value of around $20 billion at list prices.
Meanwhile, the commercial aircraft manufacturer has clinched a deal with aircraft leasing company CIT Aerospace for 30 of its new generation 737-MAX 8 jets. The contract brings to the fore the popularity of the fuel-efficient short-haul aircraft at the Paris Air Show. The 737-MAX 8 planes have a list price of $100.5 million.
The 737 MAX uses technologically advanced CFM International LEAP-1B engines helping to deliver the highest efficiency, reliability and passenger comfort in the single-aisle market. Airlines that operate the 737 MAX will witness a 13% fuel-use improvement over most fuel-efficient single-aisle airplanes today. It also has an 8% operating cost per seat advantage over tomorrow's competition. First deliveries of the MAX are expected in 2017.
The Paris Show has definitely brought in big orders for Boeing. The company has also sealed a deal with Oman Air for five Boeing Next-Generation 737-900ER airplanes. The order is worth of $473 million at current list prices.
The 737-900ER provides all the benefits of the Next-Generation 737 family with greater seating capacity. This deal makes Oman Air a leading customer in the Arabian Gulf region to order 737-900ERs. Presently, the airline operates 15 Boeing Next-Generation 737-800s and 2 737-700s and will have a backlog of 6 737-800s and 5 737-900ERs with the latest contract. The airline also has 6 Boeing 787-8s on order.
Chicago-based Boeing Company is a premier jet aircraft manufacturer and one of the largest defense contractors in the U.S. Despite the battery issue related to 787-8 that resulted in the grounding of the aircraft, Boeing is flooded with orders because of the sheer fact that its aircrafts are more fuel efficient. This not only reduces cost per mile but also cuts pollution levels. Moreover, these aircrafts are right-sized for many long-haul markets. These multi-billion dollar orders will likely act as a catalyst to growth.
Recently, at the 2013 Paris Air Show, the company has in total received 102 firm orders of the 787-10 version of its flagship Dreamliner aircraft from five different airlines worth a staggering $30 billion. United Continental Holdings, Inc. (UAL) became the launch customer with 20 firm orders. Boeing also received 30 orders each from Singapore Airlines and Air Lease Corporation (AL), 12 orders from British Airways, and 10 orders from GE Capital Aviation Services, a subsidiary of General Electric Company (GE).
Boeing presently retains a short-term Zacks Rank #3 (Hold).
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