Boeing scored big this week with record orders for its 777x air crafts at $95 billion. The orders took place at the Dubai air show, a hot shot display where Middle Eastern airlines and airplane manufacturers sign massive deals.
The vast majority of the orders came from Emirates Airlines, which purchased 150 of the company’s 777x aircrafts, a mini-jumbo aircraft with dual aisles. Boeing is slated to begin production of the new model of the current 777 in 2017 for roll-out in 2020. The airplane is set to be more fuel-efficient that the current version. After failed talks with union leaders in its production state of Washington, Boeing is looking into other states to manufacture the 777x, which will become the new 777 upon debut.
The company also took orders from Etihad airlines, Qatar Airlines and Lufthansa for a total of 109 777x’s. Etihad is an Emirates rival that is based in Abu Dhabi and owns shares in other, second-tier airlines around the world. Emirates and Qatar, another rival, joined forces at the show to secure the best economic contract for both carriers.
Boeing issued a statement that this was the largest roll-out of a commercial jetliner in history, according to dollar value. However, acquisitions were mainly limited to the Middle Eastern airlines companies, securing the region’s appearance as a dominant player in the industry and showcasing the economic prowess of countries such as UAE and Qatar. The region is looking to expand its position as a hub for connecting international aviation. Emirates is already one of the largest world airlines in terms of passengers carried.
Boeing also took orders for more than 1,000 of its 787 dream-liners, a mid-size wide body jet that is fuel-efficient and produced from composite materials. It debuted in 2009. Altogether, the company took in orders worth $129 billion.
Airbus SAS, Boeing’s chief rival, also did well during the show, with orders from Emirates for 50 planes at $23 billion. At the last airshow, 2 years ago, Boeing took a lead over French-based Airbus with a narrow margin, while at this year’s show the gap has widened tremendously.
While deals were not announced from any North American carrier, Boeing CEO Jim McNerney is confident about the future of the 777x. He stated, “We see broad, worldwide demand for the 777. We are just starting here.”
In contrast deals, both Boeing and Airbus confirmed contracts to invest billions of dollars in manufacturing plants in the Middle East.
In unrelated news, a Boeing 737 crashed in Russia earlier in the week and all 50 people on board were immediately killed. While investigators have pointed to faulty piloting, Boeing said it would cooperate in any further investigations.
While the Dow fell after briefly touching 16,000 for the first time, on Monday November 18, after the deal were announced, Boeing’s share price (BA) rose 1.7% to $138.36. It closed on November 20 at $132.45. The current annual return for Boeing’s stock is almost 85%.
Boeing as of this writing on Friday – November 22nd, is trading at $135.00 and expected to reach $150 in near future.