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Boeing (BA) Clinches Deal for Four 777 Freighter Aircraft

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·4-min read
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The Boeing Company BA recently clinched an order from Atlas Air Worldwide, a global leader in airfreight, for delivering four of its 777 freighter aircraft amid the rising demand for freighters globally. Already operational with 14 777 freighter aircraft, Atlas Air now grows its 777 freighter family with this new order. The new order expands Atlas Air’s 777 fleet with additional capacity, fuel efficiency and operational flexibility for its customers.

Boeing also marked record-setting growth for its freighters’ family in 2021 and exhibited its capability to capitalize on the growing e-commerce market. Until November 2021, the company outshined itself in the freighter aircraft arena by exceeding the previous freighter record comprising 80 orders for new production freighters and more than 80 orders for converted models.

Importance of 777 Freighter Aircraft

The 777 Freighter Aircraft is the world's largest, longest-range and most capable twin-engine freighter exhibiting the lowest trip cost as well as highest reliability of any large freighter. With a range of 4,970 nmi (Nautical Mile) (9,200km), the 777 Freighter can carry a maximum revenue payload of 102 tons (224,900 lb).

It also boasts environmentally friendly features as it entails less fuel use and CO2 emissions compared with earlier aircraft. Its capability and exceptional efficiency result in substantial savings for cargo operators, with fewer stops and associated landing fees.

Such features of the aircraft, buoyed by the rising cargo demand, have attracted several customers, thus resulting in multiple order wins for Boeing.

Growth Prospects

The emerging trend in the e-commerce market has been bolstering the air-cargo market, thus boosting the prospects of companies like Boeing that manufactures freighters. Per International Air Transport Association, global air cargo demand recorded a surge of 9.1% in September, highlighting the persistence of robust demand.

Considering solid growth trends in the air cargo market, BA stands to benefit as it is a leading global aerospace company. The current deal with Atlas Air is a testament to this fact.

Boeing anticipates the global freighter fleet to grow 70% in the next 20 years. This highlights Boeing’s strong prospects in the freighter aircraft space over the long haul.

Peer Prospects

The robust growth trend in the air cargo market will not only benefit Boeing but also aircraft manufacturers, namely Airbus SE EADSY.

Airbus SE’s freighter and cargo jets comprise A330-200F, A321P2F, A330P2F BelugaST and BelugaXL. The company’s newest freighter is the A350F, which brings the latest-generation innovation from the A350 and reduces fuel burn and CO2 emissions. The A330-200F is a new-generation cargo aircraft that meets the needs of the freight business in the mid-size and long-haul segment.

The Zacks Consensus Estimate for Airbus’ 2021 earnings indicates an improvement of 584% from the year-ago figure. Shares of Airbus have returned 20.7% in the past year.

Price Performance

Shares of Boeing have declined 0.6% in the past year compared with the industry’s fall of 29.2%.

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Zacks Investment Research

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Zacks Rank & Key Picks

Boeing carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same sector are Embraer SA ERJ and Elbit Systems ESLT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Embraer’s third-quarter revenues were $958.1 million, up 26.3% year over year. The Zacks Consensus Estimate for Embraer’s 2021 sales indicates year-over-year growth of 19.5%.

The long-term earnings growth rate for Embraer is pegged at 17%. Shares of ERJ have returned a whopping 153.2% value to its investors in the past year.

Elbit Systems’ quarterly earnings of $2.33 per share surpassed the Zacks Consensus Estimate of $1.85, delivering an earnings surprise of 25.95%.

The Zacks Consensus Estimate for Elbit Systems 2022 earnings has increased 2.2% in the past 60 days to $9.10 per share. ESLT stock has appreciated 36.9% in the past year.


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The Boeing Company (BA) : Free Stock Analysis Report

EmbraerEmpresa Brasileira de Aeronautica (ERJ) : Free Stock Analysis Report

Elbit Systems Ltd. (ESLT) : Free Stock Analysis Report

Airbus Group (EADSY) : Free Stock Analysis Report

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