The Dream Liner - Analysis
1. Competitive nature of market (Airbus vs. Boeing)
The commercial aviation world has been dominated for years by the sales conflict between Boeing 's 787 Dreamliner and Airbus 's A380
• Airbus A380 – Double of the 787 Dreamliner passengers
• 787 Dreamliner – Half of Airbus’ passengers
2. Cost per unit
By the end of 2004, customer-announced orders and commitments for the 787 reached 237 aircraft.
Boeing initially priced the 787-8 variant at US$120 million, a low figure that surprised the industry. In 2007, the list price was:
• US$146–151.5 million for the 787-3
• US$157–167 million for the 787-8
• US$189–200 million for the 787-9
Price rose due cost of labor and transportation.
3. Financial burden
Despite the grounding, Boeing continues producing the Dreamliner. Below is a scenario of what would happen if the Dreamliner stay grounded.
• 6 months – some cancellation (6 months into it, subcontracts needs to cancel it because it will be out of business)
• 9 months grounding – big problems
4. Stock performance
Boeing (BA) shares have been stoic, as seen in a stock chart, in the face of the indefinite grounding worldwide of 787 Dreamliners until authorities can figure out why batteries malfunctioned.
[pic]
The stock’s performance factors consider by investors: • Believe Boeing will fix the issues • Airlines have few options beyond waiting for the fix and then taking delivery of the 787s they’ve ordered • Airbus isn’t close to delivering its similar, fuel-efficient wide-body • And doing without new planes would hamper airline operations
It’s a remarkable position of strength, and one few customers would want to find themselves on the other side of. With a PE ratio of about 15 and a dividend yield of 2.6%, Boeing isn 't cheap but the support for the stock, even in the face of such an embarrassing setback, is amazing.
The commercial aviation world has been dominated for years by the sales conflict between Boeing 's 787 Dreamliner and Airbus 's A380
• Airbus A380 – Double of the 787 Dreamliner passengers
• 787 Dreamliner – Half of Airbus’ passengers
2. Cost per unit
By the end of 2004, customer-announced orders and commitments for the 787 reached 237 aircraft.
Boeing initially priced the 787-8 variant at US$120 million, a low figure that surprised the industry. In 2007, the list price was:
• US$146–151.5 million for the 787-3
• US$157–167 million for the 787-8
• US$189–200 million for the 787-9
Price rose due cost of labor and transportation.
3. Financial burden
Despite the grounding, Boeing continues producing the Dreamliner. Below is a scenario of what would happen if the Dreamliner stay grounded.
• 6 months – some cancellation (6 months into it, subcontracts needs to cancel it because it will be out of business)
• 9 months grounding – big problems
4. Stock performance
Boeing (BA) shares have been stoic, as seen in a stock chart, in the face of the indefinite grounding worldwide of 787 Dreamliners until authorities can figure out why batteries malfunctioned.
[pic]
The stock’s performance factors consider by investors: • Believe Boeing will fix the issues • Airlines have few options beyond waiting for the fix and then taking delivery of the 787s they’ve ordered • Airbus isn’t close to delivering its similar, fuel-efficient wide-body • And doing without new planes would hamper airline operations
It’s a remarkable position of strength, and one few customers would want to find themselves on the other side of. With a PE ratio of about 15 and a dividend yield of 2.6%, Boeing isn 't cheap but the support for the stock, even in the face of such an embarrassing setback, is amazing.
Cited: http://www.popularmechanics.com/technology/aviation/news/airbus-vs-boeing-battle-for-air-space http://en.wikipedia.org/wiki/Boeing_787_Dreamliner http://finance.yahoo.com/news/figure-boeing-shares-since-787-003111749.html http://www.cnbc.com/id/100439107