Long Runway for Commercial Airplane Makers
With 11,500 orders of undelivered aircraft--more than five years of production--Boeing and Airbus will be increasing production rates in the coming years.
With 11,500 orders of undelivered aircraft--more than five years of production--Boeing and Airbus will be increasing production rates in the coming years.
Neal Dihora: Today, we are talking about commercial aerospace--specifically aircraft with more than 100 seats, a market dominated by Boeing (BA) and Airbus (AIR).
The promise of fuel-efficient aircraft combined with low interest rates have helped these two firms combine 11,500 orders of undelivered aircraft, that totals more than five years of production. Given this and the confidence of Boeing and Airbus management teams, they will be increasing production rates over the next five years.
Along with the existing production, we expect deliveries to grow, helping sales and profits improve. Still, the recent decline in oil prices and the slowing GDP around the world could impact negatively these deliveries.
Our favorite name in this space remains Airbus Group, which we rate as 4 stars currently. We think market prices in the mid-40s represent pretty low expectations for profit improvements in the next five years.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals
and individual investors. These products and services are usually sold through
license agreements or subscriptions. Our investment management business generates
asset-based fees, which are calculated as a percentage of assets under management.
We also sell both admissions and sponsorship packages for our investment conferences
and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.