What Does The Ryanair/Boeing Deal Mean For Investors?

The Boeing Company BA is bullish on the long-term prospects for the commercial aviation industry. So much so that the company is predicting that the market for new passenger aircraft will be worth $5 trillion over the next two decades.

Since Boeing typically splits orders for the largest jets with its biggest rival, Airbus Group EADSY, this could be mean big bucks for investors of the Chicago-based aerospace titan.

If recent events, including the $22 billion order by Ryanair Holdings for up to 200 of Boeing's planned 737 Max aircraft are any indication, the company is well on the way toward getting a sizable chunk of the pie.

Maxing Out Profits

The 737, the biggest-selling passenger jet in history with about 8,000 sold, is getting a face-lift for 2017, 50 years after its first flight. The Max, the fourth-generation version of the narrow-body, features improved electronics and aerodynamics, and a more fuel-efficient engine, the CFM Leap 1-B. More than 2,200 737 Max aircraft have been ordered up by airlines worldwide.

Boeing investors, and those of engine supplier CFM International, of which General Electric Company is a partner, should continue to profit as the plane enters revenue service.

Pure Power For Airbus

The Airbus answer to the 737 is the A320neo, or new engine option for its popular narrow-body plane. Some are powered by versions of the Pratt & Whitney, a division of industrial giant United Technologies, PurePower PW1000G family of engines and the rest by the CFM Leap 1-A powerplant. The A320neo is expected to beat the Max to market by a couple of years.