The Boeing Company (NYSE:BA) early in June predicted there to be approximately twice as many airplanes in the sky in the next two decades, and with a recent spate of sales it looks like the firm could be right.
I’m planning on buying shares of The Boeing Company (NYSE:BA) in the next week for that very reason. Just taking a look at some of the headlines is enough to make investors in this company cry for joy: Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) May Buy 200 More Boeing Jetliners (Wall Street Journal, June 24), and Dreamliners get more attention, says Boeing (New Zealand Herald, June 24). Certainly this attention must mean something, and those are just two headlines on the day this post was written.
Ryanair sees increase in ridership
Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) already announced around mid-June its plan to purchase 175 The Boeing Company (NYSE:BA) airplanes for about $15.6 billion. And at the time, Chief Executive Michael O’Leary said he expected another major deal with The Boeing Company (NYSE:BA) by the end of the year. His firm is Europe’s largest budget carrier. The company is making the purchase as many analysts have said growth at the company is limited. However, Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) recently raised growth forecasts and said it will carry 110 million passengers by 2020.
According to O’Leary, the company plans to develop a trans-Atlantic low-cost airline. He said the major hindrance in developing the airline is the lack of aircraft available for such a mission. He gave a timeline of three to four years to develop the trans-Atlantic airline, which would be a new brand of Ryanair. As if a new airline isn’t enough, O’Leary was denied in his growth efforts by the European Union to purchase rival airline Aer Lingus, however Ryanair owns an interest in that company. The European economy is behind the United States in its recovery, and buying Ryanair could have you in the game early, before the share price really takes off. The company obviously has high hopes for increased ridership, as people are more able to afford vacations and businesses can pay to send employees abroad.
What the purchases mean
The massive acquisitions tell me something major: The Boeing Company (NYSE:BA) is right about the doubling of airplanes by the early 2030s. That’s enough to keep sales at The Boeing Company (NYSE:BA) up long into the future. Furthermore, have you noticed that many of the planes airlines are currently using are quite old? That’s because many are from the 1970s and are in dire need of replacement. They aren’t quite falling out of the sky, but as an avid flyer I’ve noticed long delays due to maintenance. This could be because of the sheer age of the aircraft, prompting many replacement orders.