Boeing logs record deliveries for 2017, upbeat on 2018

 Publish date: Wed, 10 Jan 2018, 07:33 AM

NEW YORK: Boeing reported record commercial plane deliveries for 2017 on Tuesday and said cargo and customer passenger trends continued to look strong for 2018.

The improvements were fueled by global economic growth of three percent and an increase in overall passenger traffic that has outpaced historical trends, said Boeing vice president of marketing Randy Tinseth.

"It is a very, very strong marketplace," Tinseth told reporters. "We continue to see upward pressure as we look into the future."

Boeing shares jumped 2.6 percent to $318.24, making the company the biggest gainer in the Dow in afternoon trading.

"They continue to execute very well," said Jim Corridore, an analyst at CFRA Research.

Boeing delivered 763 commercial planes last year, up from the 748 in 2016 and in line with its forecast. Last year's deliveries also topped the prior record of 762 set in 2015.

Tinseth said in a blog post that Boeing deliveries will top those of rival Airbus for the sixth straight year. Airbus is scheduled to report its 2017 deliveries on January 15.

Boeing's results once again were led by its most popular plane, the single-aisle 737, which comprised nearly 70 percent of total deliveries. It was followed by the 787, which accounted for 136.

The aerospace giant has boosted the production rates for both planes to meet rising demand. The company remains on track to raise output of the 747 from 47 a month currently to 52 later this year, and 57 in 2019, Tinseth said.

Boeing reported 912 new commercial orders in 2017, a 36.5 percent increase from 2016, with a total value of US$134.8 billion based on listed prices.

A United Airlines Boeing 767-424(ER) aircraft takes off from Zurich Airport January 9, 2018. REUTERS pic

The strong overall market was due in part to improved airline industry profits, with the earnings over the last three years besting the cumulative earnings from the prior 30 years, Tinseth noted.

One open question facing Boeing is whether it will be able to complete a contract to sell 80 planes to Iran Air for US$16.6 billion. In October, President Donald Trump withdrew official support for a 2015 agreement that granted Iran relief from sanctions in exchange for new curbs on its nuclear program.

If Trump were to bar the sales to Iran Air, "it could be a little bit of a setback, but it's nothing huge," CFRA's Corridore said, noting that Boeing has other work that could offset the hit from Iran.

Corridore praised a possible partnership between Boeing and Brazil's Embraer after the two sides acknowledged in December they were in talks on a potential combination. However, it is unclear if an agreement will be feasible given the opposition in Brasilia.

Brazil President Michel Temer has said Brazil would welcome "an injection of foreign capital," but would not permit Boeing to acquire the Brazilian company outright. - AFP

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