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Boeing Gets Ryanair Commitment

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The Boeing Company (BA - Free Report) has received an order-commitment from Irish low cost carrier Ryanair Holdings plc (RYAAY - Free Report) to deliver 175 units of Next-Generation 737-800 airplanes. This assurance is part of Ryanair’s fleet expansion program and has the potential value of $15.6 billion at list prices, if exercised.

Boeing has a long-standing alliance with Ryanair and aims to meet its commitments in terms of maintaining product standard along with delivery timing. Ryanair is one of the major operators of the 737-800 airplanes, having more than 300 units. The airline took delivery of its first 737-800 airplane from Boeing in 1999.

The Boeing Next-Generation 737-800 airplanes came into service on Sep 5, 1994. This model continues to be a pillar of strength for Boeing in the commercial airplane sector. Steady demand for this model is primarily driven by fuel efficiency and lower operating costs compared with other models. The single-aisle aircraft can accommodate 162-189 passengers and can fly approximately 3,000 nautical miles (3,452.3 miles).

To cope with the anticipated higher demand, the company increased the production rate of this airplane twice in the recent past. Boeing aims to increase production to 38 from 35 airplanes per month from the second quarter of 2013, and subsequently increase it to 42 airplanes per month next year.

As of Mar 12, 2013, net orders received by Boeing for 737, stands at 138 airplanes. The delivery of Next-Generation 737 in full-year 2012 reached 415 units, making it the company’s highest selling model.

During fourth-quarter 2012, top-line contribution from Boeing's Commercial Airplane segment rose 32% year over year along with net orders booking of 394 airplanes. At the end of 2012, the company’s backlog was more than 4,400 airplanes valued at a record $319 billion.

Chicago-based Boeing Company is a premier jet aircraft manufacturer and one of the largest defense contractors in the U.S.

The company currently has a Zacks Rank #2 (Buy). Other stocks from the sector that are also performing well presently include Ducommun Inc. (DCO - Free Report) with a Zacks Rank #1 (Strong Buy), and Lockheed Martin Corporation (LMT - Free Report)   with a Zacks Rank #2 (Buy).

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