High Crude Prices Will Bode Well for Boeing (BA) as 747 Demand Wanes
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Price: $99.75 +1.86%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 2.1%
Revenue Growth %: -2.6%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 2.1%
Revenue Growth %: -2.6%
Trade BA Now!
Boeing's (NYSE: BA) classic 747-400 offering, once the most popular aircraft in the sky, is now feeling the consequences of demand for older models which is just not there any more. And that might be the best news for Boeing -- and rival Airbus -- to come along in a while.
According to the research firm Ascend Worldwide, ten-year-old 747-400s are fetching a record low of $36 million each, down about 10 percent from similarly-aged planes sold in 2011.
The news means more airlines are recognizing the importance of improved fuel economy for their fleet.
Ascend noted about 48 of the 404 747-400 planes still around are being placed in storage as there is less demand to turn the humpbacked-aircraft into a freight plane. For the most part, the current 747-400s are being parted-out to buyers.
With Boeing looking to sell more 777s and Airbus doing the same with its A380, the news is a boon for both. A Bloomberg piece from this morning pointed to a burgeoning in Asian airlines as companies eschew older models for new offerings. Japan Air is said to have stopped using the 747-400, with Cathay Pacific, Korean Air, and Malaysian Airline System aiming to do the same. Thai Airways is in the process of phasing out 747-400s with the sale of at least four as the airline is making room for six new A380s.
An interesting fact: Malaysian Air will consume about 1,181 barrels of jet fuel flying its 494-seat A380 from London to Kuala Lumpur, versus 999 barrels for the 359-seat 747-400 model. The company is effectively moving 38 percent more people on just an 18 percent increase in fuel.
As of June 5, 2012, Boeing said it had delivered 34 777s and eight of its new 787 Dreamliners. Airbus has delivered three A380s in May.
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According to the research firm Ascend Worldwide, ten-year-old 747-400s are fetching a record low of $36 million each, down about 10 percent from similarly-aged planes sold in 2011.
The news means more airlines are recognizing the importance of improved fuel economy for their fleet.
Ascend noted about 48 of the 404 747-400 planes still around are being placed in storage as there is less demand to turn the humpbacked-aircraft into a freight plane. For the most part, the current 747-400s are being parted-out to buyers.
With Boeing looking to sell more 777s and Airbus doing the same with its A380, the news is a boon for both. A Bloomberg piece from this morning pointed to a burgeoning in Asian airlines as companies eschew older models for new offerings. Japan Air is said to have stopped using the 747-400, with Cathay Pacific, Korean Air, and Malaysian Airline System aiming to do the same. Thai Airways is in the process of phasing out 747-400s with the sale of at least four as the airline is making room for six new A380s.
An interesting fact: Malaysian Air will consume about 1,181 barrels of jet fuel flying its 494-seat A380 from London to Kuala Lumpur, versus 999 barrels for the 359-seat 747-400 model. The company is effectively moving 38 percent more people on just an 18 percent increase in fuel.
As of June 5, 2012, Boeing said it had delivered 34 777s and eight of its new 787 Dreamliners. Airbus has delivered three A380s in May.
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