The Boeing Company (BA) and Airbus Ink Deals in Paris. Should You Buy Suppliers?

Page 1 of 2

“I love Paris When it Sizzles,” Cole Porter

The Paris Air Show was a success for major airplane makers Airbus and The Boeing Company (NYSE:BA). At the show, the two companies reported more than $160 billion in orders.

The orders add to an already large backlog of planes, providing stable multi-year growth for the aerospace suppliers TransDigm Group Incorporated (NYSE:TDG), Hexcel Corporation (NYSE:HXL) and B/E Aerospace Inc (NASDAQ:BEAV).

A big show for new orders

The Boeing Company (NYSE:BA)

Airbus and The Boeing Company (NYSE:BA) are always battling for orders at the high profile Paris and Farnborough Air shows, held in alternating years in France and the United Kingdom.

This year was no different. Airbus came out on top, notching deals for 466 planes worth more than $70 billion. In dollar terms, that just about matched the $72 billion sold at the 2011 Paris show.

At the 2013 show, Airbus orders were strongest from Asian operators, including Singapore Airlines, and U.S. operators, including United Airlines, who ordered 35 A350-1000s. Airbus took its A350XWB into the air for the first time above the show.

Boeing also had a strong showing. The company debut a 787-10 that can hold more passengers and inked agreements for 442 planes worth $66 billion. The Boeing Company (NYSE:BA)’s Paris orders brought its net 2013 orders to 692 planes. That’s a big showing compared to the 2011 Paris Air Show when Boeing reported orders worth $22 billion.

Overall, industry orders came in at roughly $170 billion at the Paris show.

The orders add to an already bulging backlog of planes

The new Airbus orders add to a backlog of 4,928 planes at the end of May. Boeing’s backlog exited this Spring north of 4,400.

That has both manufacturers working closely with suppliers to ramp capacity to fuel faster production. Both makers view capacity growth as inevitable in order to meet an expected doubling of passenger planes over the next two decades.

Airbus entered 2012 with plans to build 570 planes, following production of 534 in 2011, thanks to a ramping of monthly A320 production to 42 per month. By year end it had delivered 588 aircraft, exceeding its plans.

Over at The Boeing Company (NYSE:BA), the company delivered 601 planes last year and Boeing hopes to deliver even more this year as it increases 737 production from 38 a month to 42.

The swelling orders and ramping production schedule suggests aerospace suppliers are in for a multi-year run of stable revenue and profit growth.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!