Boeing Secures Order For 8 Dreamliners From Air New Zealand
Zacks Investment Research | May 28, 2019 08:04AM ET
The Boeing Company (NYSE:BA) has announced that it received an order for eight 787-10 airplane from Air New Zealand — the flagship carrier of the nation. The list price of the planes was $2.7 billion but the carrier was able to get a discount, which is quite common for bulk orders.
Air New Zealand will take delivery of the new 787-10 planes over a five-year period, beginning 2022. These fuel-efficient planes will be utilized by the carrier to gradually replace its fleet of eight Boeing 777-200.
Details of Boeing 787-10
The 787 Dreamliner is admired for the comfort and fuel efficiency compared to the planes of the same class. The 787-10 planes will have the ability to fly 6,430 miles and carry 330 passengers. These planes use engines either made by General Electric Company (NYSE:GE) or Rolls Royce (LON:RR). Air New Zealand opted for the Boston-based GE engines for its new planes.
The addition of 787-10 will be profitable to the carrier as it will be 25% more fuel efficient than the earlier versions.
Tough Times for Boeing
As of Apr 30, 2019, Boeing’s 2019 net orders were a negative 119, primarily due to adoption of new revenue recognition accounting standard (ASC 606) and drop in Boeing 737 orders. Taking into consideration the new accounting standard, the net order for 787 model was 28 at the end of April. The new orders for the 787 model are a welcome change for this commercial airplane manufacturer.
Boeing delivered 23 planes in April 2019 compared with 44 planes a year ago while Airbus Group (PA:AIR) SE (OTC:EADSY) delivered 70 and 51 commercial jets, respectively. Boeing’s deliveries have been severely affected following the crash of Ethiopian Airlines Flight and grounding of 737 Max fleet by the carriers across the globe.
The 737 Max model is expected to fly post the confirmation and satisfaction of Aviation regulators from around the world.
Price Performance
Since the crash of 737 Max on Mar 10, 2019, shares of Boeing have declined wider than its Zacks Investment Research
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