Airbus Group NV (AIR) Plays $15 billion A350 Card To Get Ahead Of The Boeing Company (BA)

Airbus Group NV (EPA:AIR)’s newest development, the A350, has finished its testing. The $15 billion investment to achieve the twin-engine A350-900, capable of carrying 315 passengers with a range of 7,750 nautical miles; and a later version the A350-1000 with 369 seats, that will enter service in 2017. The recently developed Airbus should, as mentioned in Bloomberg article, “ensure certification of Airbus’s answer to The Boeing Company (NYSE:BA)’s 787 Dreamliner within weeks”. The airplane manufacturing war, which Boeing was wining, has changed its course; Airbus’s new model should establish new revenue potential.

Flight testing has finished with the tour from Helsinki to all 14 other destinations, including Johannesburg, Sydney, Santiago, Doha and Moscow. Collecting 708 orders, the fuel-efficient Airbus Group NV (EPA:AIR) A350, two largest models, have proven to be on grate demand. On the other hand, the smaller model, A350-800 (276 seats) has shown a low demand, with only 34 orders so far. “It’s dead, but still valiantly holding on in its flight to remain undead” says Richard Aboulafia, an aerospace analyst with Teal Group. It is expected that the A350-800 should be replaced for the A330neo (neo standing for “new engine option”), which will make it more fuel efficient and provide 400 extra miles over the existing A330; therefore giving Airbus, the ultimate plain for over 315 and below the 300 passengers.

Airbus Group NV (AIR) is one of the leading Airplane manufacturing companies, based in Blagnac (France) and with its manufacturing facilities mainly in France, Germany, Spain and United Kingdom. The company has a market capital of $33.75 Billion. The company has a P/E ratio of 20.4 and dividend yield of 1.74%.

The Boeing Company (NYSE:BA) an American multinational corporationis, as well as Airbus, another leading Airplane manufacturing company. The Boeing Company (NYSE:BA) designs, manufactures and sells fixed-wing aircraft, rotocraft, rockets and satellites. Its market capital stands at $87.90 Billion, a price share of $121.98. The company has a P/E of 18.4 and the dividend yield of 2.4.

This article has been written by Alexander Scheller and edited by Serkan Ünal., Inc. (AMZN) Card Readers Will Be Available at Staples, Inc. (SPLS)


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One Comment;

  1. GarryGR said:

    Airbus and Boeing are both doing really well. But the A350 is not equal to the 787; something many folks appear not to know. Airbus, despite their customers desires, decided not to match the 787’s solid composite fuselage sections or the reduction of hydraulics (replaced with electronic components), etc. Airbus felt it would take them to long to develop the A350 if they matched all the new technology in the 787. So, even though the A350 is a newer/later offering than the 787, it is not what many seem to believe, a higher technology plane.

    You might think, from this headline, that Airbus will rapidly surpass Boeing, because the A350 has completed its test flights. But, Airbus will not be able to match the production rate of the 787 for a number of years, if ever. Boeing has more orders for the 787 than Airbus has for the A350 so unless Airbus can take in more orders than Boeing has for the 787, they won’t be producing more A350s than Boeing does 787s.

    And, I have to hit on one of my hot buttons, even though this article didn’t directly mention it: “ORDERS”. Airbus has been hyping their order numbers for more than a decade now – it was more than 10 years ago now, when Airbus first claimed more orders, for the year, than Boeing. Since then, Airbus has done that the majority of the times (yearly race) and has accumulated a larger order backlog than Boeing, although, this year, Airbus has had almost 300 cancellations (maybe 300 by now). Orders are not a sale, as those 300 cancellations illustrate. Since 2012, and most of the years before that, Boeing has been delivering more planes than Airbus. That will likely continue for some years, going forward. Boeing is producing 10 787s per month now while airbus hopes to be producing 4 A350 per month by the end of the year. Ramping up production is not easy; if it were, Airbus and Boeing would be producing a lot more planes than they are, because the wait for delivery of many models, is now out past 2020! While, Airbus will certainly increase their production rate, so will Boeing. The race is on and Boeing is in the lead.

    Both companies will be able to deliver (which, by the way, is when the sale actually occurs, not when the order is taken) pretty much everything they can produce, for a number of years. Well, barring another economic disaster! ;-(




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