Leading plane maker The Boeing Co. (BA - Free Report) received orders for three next generation 737-800 airplanes from Belarus flag carrier Belavia Airlines. The current list price of a Boeing 737-800 is $90.5 million.
737 is Boeing’s best-selling airplane. Boeing exited first quarter 2014 with a backlog of 5,100 airplanes valued at $374 billion. The majority of this backlog comprises airplanes from its extended 737 family.
The very popular single-aisle 737-800 jet, launched in Sep 1994, has received 4,659 orders to date. 737-800’s appeal lies in its ability to fly further, carry more passengers and consume lesser fuel as compared to competing models.
Belavia Airlines’ New Planes for New Routes
The 737-800 has a maximum range of 3,115 nautical miles (5,762 km). This will help Belavia Airlines to open up new routes and start non-stop flights to destinations like Tenerife, Canary Islands and Dubai.
Also, these fuel efficient airplanes will lower operational costs.
Benefits of a Non-Diverse Fleet
Belavia Airlines already uses 15 of Boeing’s 737 aircraft in its fleet. Belavia Airlines also has four airplanes from Embraer SA (ERJ - Free Report) .
However, the latest order for the 737-800s indicates Belavia Airlines might be planning to make its fleet as uniform as possible with 62% comprising Boeing airplanes.
Airline operators worldwide try to keep their fleet as non-diverse as possible. It helps to cut down on operating expenses and ensures better after-sales services from the manufacturers.
Per a study from Boeing, there is a huge possibility in the commercial aerospace market. The company forecasts demand for 35,280 airplanes in the 2013-2032 frame, valued at a staggering $4.8 trillion. Nearly 70% of the airplanes will be of the single aisle variety, with Boeing having a large share of this market alongside Airbus.
Boeing carries a Zacks Rank #3 (Hold). Besides having a stronghold in the commercial airplane manufacturing market, Boeing has a prominent defense presence. Investors interested in the aerospace and defense industry may consider stocks like General Dynamics Corp. (GD - Free Report) and Lockheed Martin Corporation (LMT - Free Report) . Both these stocks carry a Zacks Rank #2 (Buy).