Boeing Defies Gravity
The world is so hungry for aircraft that, for the companies that make them, no problem seems too big to overcome.
Boeing (BA), for instance, announced in October that the eagerly awaited 787 will be delayed for six months. Boeing's stock has taken a hit, shedding about 15% since the start of last month.
Still, it remains up for the year, and some analysts view the decline as a buying opportunity. On Wednesday, shares traded at $92.57, up 0.9% on the session.
Meanwhile, the orders keep coming. Last week, Chicago-based Boeing said it has 1,047 orders this year, already topping its record 2006 total of 1,044.The mountain is higher for France's Airbus. During the past two years, its afflictions have included cost overruns and delivery delays for the A380 and A350, as well as a meltdown at parent European Aeronautic Defence & Space Co. Now, because it sells planes in dollars but incurs most of its costs in euros, Airbus is a major victim of the greenback's decline. Continuing deterioration in the currency's value could have a "life-threatening" impact on the company, CEO Thomas Enders said in a speech last week. The immediate impact, he said, is that "some of our planned product improvements will have to remain pipe dreams." Yet Airbus finds itself in the midst of a resurgence. This year, the company will almost certainly surpass the record 1,055 orders it set in 2005. This month, it announced 163 orders at the Dubai Air Show, then signed a contract Monday to sell 160 airplanes to China. Now, the A380 has begun flying, the A350 is popular and the A320 has five years of back orders. "Airbus has come roaring back in orders and the A350 is doing marvelously, even if the dollar is killing them," says aerospace consultant Scott Hamilton. "As for Boeing, this has been a great year, with the hiccup being the delay in the 787."
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