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Boeing (BA) to Supply Up to 20 777-9 Jets to Ethiopian Airlines
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The Boeing Company (BA - Free Report) recently clinched an order from Ethiopian Airlines to deliver eight of its 777-9 widebody jets, with an additional opportunity for supplying up to 20 aircraft. This order represents the 777X airplanes’ entry into Africa.
Significance of 777X
The Boeing 777X is the world’s largest and most efficient twin-engine jet, with 10% lower fuel use, emissions and operating costs than its competitors. In fourth-quarter 2023, Boeing resumed production of 777X and booked orders for 98 jets. The latest contract win will boost BA’s first-quarter jet orders.
The 777-9 variant features new carbon-fiber composite wings and engines. The 777-9 model, 19 feet longer than the 777-8, can fly 426 passengers and has a range of 7,285 nautical miles (13,500 km).
Revenues earned from these deliveries, including the latest deal for up to 20 jets, should significantly bolster Boeing’s commercial unit’s top line, which witnessed a solid 30% year-over-year improvement in 2023.
Prospects in Africa’s Aviation Market
As we continue to witness a steady recovery in the global aviation industry over the past few months, the African region has seen an upward growth trend. To this end, Boeing’s commercial market outlook estimates the overall air traffic growth in Africa to be 7.4% through 2042, above the global average growth rate of 6.1%. It also projects that the continent will need 1,025 airplanes over the next two decades, with more than 70% of deliveries expected to be single-aisle jets.
To this end, it is imperative to mention that Boeing already enjoys a strong presence in Africa’s commercial aerospace industry. The jet maker enjoys a 75-year-long relationship with Ethiopian Airlines, which has a current fleet of 29 of BA’s 787 Dreamliners, 20 777s, three 767s, 27 Next-Generation 737s and 15 737 MAX jets. In November 2023, Ethiopian Airlines placed the largest-ever order for Boeing airplanes in African history, with 11 787 Dreamliner and 20 737 MAX airplanes with an opportunity for 15 and 21 additional jets, respectively.
Such developments, along with the latest deal, should enable Boeing to capture more market share from Africa’s expanding aviation industry in the coming days.
Peer Prospects
A few other aerospace players that are expected to gain from the country’s aviation market are Airbus SE (EADSY - Free Report) and Embraer (ERJ - Free Report) .
Airbus has created its presence in Africa for around 50 years now. Its aircraft, including the A350, A330neo, A320neo and A220, have been delivered to African carriers. In June 2023, Air Algérie had placed an order for five A330-900s and two A350-1000s.
EADSY boasts a long-term (three- to five years) earnings growth rate of 12.4%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 9.5% from that reported in 2023.
Embraer’s commercial aviation has a strong presence in the African region with its E-Jets. In September 2023, Embraer received an order from Nigeria-based Air Peace for five E175 aircraft. In the same month, the company delivered the first of the three new E175 E-Jets to Overland Airways of Nigeria.
ERJ boasts a long-term earnings growth rate of 17%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 13.2% from that estimated in 2023.
Price Performance
In the past year, shares of BA have lost 3% compared with the industry’s 8% decline.
TXT boasts a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for its 2024 sales is pegged at $14.64 billion, indicating an improvement of 7% from that reported in 2023.
The Zacks Consensus Estimate for TXT’s 2024 earnings is pegged at $6.15 per share, indicating an improvement of 10% from that reported in 2023. The stock delivered an average earnings surprise of 13.53% in the last four quarters.
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Boeing (BA) to Supply Up to 20 777-9 Jets to Ethiopian Airlines
The Boeing Company (BA - Free Report) recently clinched an order from Ethiopian Airlines to deliver eight of its 777-9 widebody jets, with an additional opportunity for supplying up to 20 aircraft. This order represents the 777X airplanes’ entry into Africa.
Significance of 777X
The Boeing 777X is the world’s largest and most efficient twin-engine jet, with 10% lower fuel use, emissions and operating costs than its competitors. In fourth-quarter 2023, Boeing resumed production of 777X and booked orders for 98 jets. The latest contract win will boost BA’s first-quarter jet orders.
The 777-9 variant features new carbon-fiber composite wings and engines. The 777-9 model, 19 feet longer than the 777-8, can fly 426 passengers and has a range of 7,285 nautical miles (13,500 km).
Revenues earned from these deliveries, including the latest deal for up to 20 jets, should significantly bolster Boeing’s commercial unit’s top line, which witnessed a solid 30% year-over-year improvement in 2023.
Prospects in Africa’s Aviation Market
As we continue to witness a steady recovery in the global aviation industry over the past few months, the African region has seen an upward growth trend. To this end, Boeing’s commercial market outlook estimates the overall air traffic growth in Africa to be 7.4% through 2042, above the global average growth rate of 6.1%. It also projects that the continent will need 1,025 airplanes over the next two decades, with more than 70% of deliveries expected to be single-aisle jets.
To this end, it is imperative to mention that Boeing already enjoys a strong presence in Africa’s commercial aerospace industry. The jet maker enjoys a 75-year-long relationship with Ethiopian Airlines, which has a current fleet of 29 of BA’s 787 Dreamliners, 20 777s, three 767s, 27 Next-Generation 737s and 15 737 MAX jets. In November 2023, Ethiopian Airlines placed the largest-ever order for Boeing airplanes in African history, with 11 787 Dreamliner and 20 737 MAX airplanes with an opportunity for 15 and 21 additional jets, respectively.
Such developments, along with the latest deal, should enable Boeing to capture more market share from Africa’s expanding aviation industry in the coming days.
Peer Prospects
A few other aerospace players that are expected to gain from the country’s aviation market are Airbus SE (EADSY - Free Report) and Embraer (ERJ - Free Report) .
Airbus has created its presence in Africa for around 50 years now. Its aircraft, including the A350, A330neo, A320neo and A220, have been delivered to African carriers. In June 2023, Air Algérie had placed an order for five A330-900s and two A350-1000s.
EADSY boasts a long-term (three- to five years) earnings growth rate of 12.4%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 9.5% from that reported in 2023.
Embraer’s commercial aviation has a strong presence in the African region with its E-Jets. In September 2023, Embraer received an order from Nigeria-based Air Peace for five E175 aircraft. In the same month, the company delivered the first of the three new E175 E-Jets to Overland Airways of Nigeria.
ERJ boasts a long-term earnings growth rate of 17%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 13.2% from that estimated in 2023.
Price Performance
In the past year, shares of BA have lost 3% compared with the industry’s 8% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Pick
Boeing currently has a Zacks Rank #4 (Sell).
A better-ranked stock in the same industry is Textron Inc. (TXT - Free Report) , carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TXT boasts a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for its 2024 sales is pegged at $14.64 billion, indicating an improvement of 7% from that reported in 2023.
The Zacks Consensus Estimate for TXT’s 2024 earnings is pegged at $6.15 per share, indicating an improvement of 10% from that reported in 2023. The stock delivered an average earnings surprise of 13.53% in the last four quarters.