Thu, Jan 11, 2018 - Page 10 News List

Boeing reports record deliveries last year

MINOR SETBACKS?A deal to sell Iran Air 80 airplanes could be thwarted by the US and Brazil has clearly stated its opposition to an acquisition of Embraer SA

AFP, NEW YORK

A Boeing Co 737-400 operated by Japan Transocean Air Co Ltd, a unit of Japan Airlines Co Ltd, taxis as a Skymark Airlines Inc Boeing 737-800 takes off at Tokyo International Airport in Japan yesterday.

Photo: Reuters

Boeing Co on Tuesday reported record commercial airplane deliveries for last year and said cargo and customer passenger trends continued to look strong for this year.

The improvements were fueled by global economic growth of 3 percent and an increase in overall passenger traffic that has outpaced historical trends, Boeing vice president of marketing Randy Tinseth said.

“It is a very, very strong marketplace,” Tinseth told reporters. “We continue to see upward pressure as we look into the future.”

Boeing shares jumped 2.6 percent to US$318.24, making the company the biggest gainer in the Dow Jones Industrial Average in afternoon trading.

“They continue to execute very well,” CFRA Research analyst Jim Corridore said.

Boeing delivered 763 commercial airplanes last year, up from 748 in 2016 and in line with its forecast. Last year’s deliveries also topped the prior record of 762 set in 2015.

Tinseth said in a blog post that Boeing deliveries will top those of rival Airbus SE for the sixth straight year.

Airbus is scheduled to report its deliveries for last year on Monday next week.

Boeing’s results were once again led by its most popular airplane, the single-aisle 737, which comprised nearly 70 percent of total deliveries. It was followed by the 787, which accounted for 136.

The aerospace giant has boosted the production rates for both airplanes to meet rising demand. The company remains on track to raise output of the 747 from 47 per month to 52 later this year, and 57 next year, Tinseth said.

Boeing reported 912 new commercial orders last year, a 36.5 percent increase from 2016, with a total value of US$134.8 billion based on listed prices.

The strong overall market was due in part to improved airline industry profits, with the earnings over the past three years besting the cumulative earnings from the prior 30 years, Tinseth said.

One open question facing Boeing is whether it will be able to complete a contract to sell 80 airplanes to Iran Air for US$16.6 billion.

In October last year, US President Donald Trump withdrew official support for a 2015 agreement that granted Iran relief from sanctions in exchange for new curbs on its nuclear program.

If Trump were to bar the sales to Iran Air, “it could be a little bit of a setback, but it’s nothing huge,” Corridore said, adding that Boeing has other work that could offset the hit from Iran.

Corridore praised a possible partnership between Boeing and Brazil’s Embraer SA after the two sides last month acknowledged that they were in talks on a potential combination.

However, it is unclear if an agreement will be feasible given the opposition in Brasilia.

Brazilian President Michel Temer has said Brazil would welcome “an injection of foreign capital,” but would not permit Boeing to acquire the company outright.

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