Boeing Gets Commitment for 60 737s from Air China - Analyst Blog

Commercial aerospace behemoth The Boeing Company (BA) received a commitment from Air China for the purchase of 60 737 airplanes including a mix of Next-Generation 737 and 737 MAX. The entire deal is valued at more than $6 billion at list prices.

The business partnership between Boeing and China's flag carrier dates back for more than two decades. At present, Boeing airplanes constitute nearly 50% of the active fleet of Air China. Airliners prefer a less divergent operating fleet as this strategy allows the operators to get better after-sales services from the manufacturers. This consequently lowers their operating costs.

Moreover, the long range, fuel efficient 737 airplanes provide better customer comfort compared to its competing models. Orders for 737 once again dominated Boeing's 2014 order book. Through Dec 16, 2014, the 737 model received net orders for 1,019 airplanes. This is nearly 77.4% of the total orders received by Boeing til Dec 16, 2014.

A report from Boeing on the global commercial market indicated that demand for single-aisle airplanes will rise by more than 117% in 2033 from 2013 levels. Per the report, demand for new airplanes is expected to come mainly from the Asia-Pacific region buoyed by GDP growth and increased air travel in the region.

Recently, Boeing received orders for its premier single-aisle 737-800 airplane from Singapore-based leasing company BOC Aviation. BOC Aviation ordered two airplanes valued at $186 million (read: Boeing Gets a Couple of 737-800 Orders from BOC Aviation).

This Zacks Rank #2 (Buy) stock also has a wide presence in the defense sector. Other well-ranked stocks in the space are General Dynamics Corp. (GD), Rockwell Collins Inc. (COL), and Hexcel Corp. (HXL). All these stocks carry the same Zacks Rank as Boeing.