Very recently it was revealed that Boeing (NYSE:BA) had entered into a $4.3 billion deal with Shenzhen Airlines where the Beijing-based passenger carrier will purchase 46 737 models. This could potentially be a game changer for the American Airline manufacturer especially given how its European rival Airbus Group’s stock has offered investors better returns. Where Airbus stock has seen a rise of more than 37% since the beginning of the year, Boeing stock has only experienced an 8% appreciation. This new contract with the Chinese airline is bound to be lucrative for both companies. Boeing’s price list shows that its 737 Family models range from $78.3 million to $113.3 million, however it is important to note that bulk orders in the airline …show more content…
The airplane manufacturing giant began to assemble the wings of its upgraded 737s using automation designed to boost factory output far beyond the current record pace. The start of this factory’s operation to produce the wings of 737 Max marks the meeting of a schedule which the company set years ago as well as increasing much needed efficiency in the production process. In fact the new automated process reduces manufacturing time by 30% while at the same time taking up less than half the floorspace of the system it replaced and all of this without any downsizing in sight till fiscal 2018. Now the 737 Max was launched as a response to the Airbus’ A320neo. In other words this factory upgrade is going to streamline the expenses in the financials and will most likely have a direct impact on Boeing’s bottom line. There are about 2,700 orders for the new 737 Max as compared to the nearly 3,800 orders for the A320neo models. The upgraded factory in Seattle, Washington is expected to churn out the first 737 Max wing by this summer and should help the company maintain its schedule to begin test flights by early 2016 with the first aircraft to be delivered to Southwest Airlines Co. in the third quarter of fiscal 2017. The upgrades at the plant are going to continue to the point where the company expects to increase aircraft production to 52 per month by the end of fiscal 2018. Not to be left behind, Airbus plans to increase production of its A320neo to 50 aircrafts a month by the end of fiscal 2016 and are mulling over options to further increase the production