Boeing (BA) and Airbus (EADSY) picked up a few more orders at the Paris Air Show on Wednesday, following their big announcements in the previous days. Boeing shares fell near a buy point.
So far, “there wasn’t much new in terms of orders” at the air show, Bank of America analyst Ronald Epstein wrote in a research note on Wednesday. Major announcements, such as Boeing and Airbus’ Air India orders, were announced earlier, the analyst said.
Analysts at Third Bridge, a research firm, called new jet orders at the show “all but irrelevant” in the short to medium term. As supply chain challenges persist, deliveries remain the focus, they said.
The aircraft manufacturers, as well as their jet engine suppliers, RTX (RTX) and General Electric (GE), continue to highlight a strong demand outlook, offsetting production and certification issues.
India was in the spotlight at the air show, which ends on Sunday. Flag carrier Air India and its budget rival IndiGo made headlines amid strong growth in the country’s air travel market.
Boeing, Airbus Report orders
On Wednesday, Boeing announced a total of eight new aircraft orders from India’s new Akasa Air, Air Lease (AL) and Luxair.
It followed news on Tuesday that Air India has completed a previously reported order for up to 290 new Boeing jets, including the 737 Max jet and the 787 Dreamliner. China Airlines also strengthened orders for eight 787 Dreamliners, while Algeria-based Air Algerie confirmed an order for eight Max 737 jets, the Dow Jones aviation giant said.
On Wednesday, Boeing’s European rival Airbus announced that aircraft leasing company Avolon has signed a non-binding agreement to order 20 A330neo aircraft.
Airbus said on Tuesday that Air India has confirmed an earlier order for 250 jets, including 210 A320/A321 narrowbodies and 40 A350 widebodies. The company also confirmed 25 A321 orders from ultra-low-cost Mexican airline Volaris.
On Monday, Airbus announced an order for 500 A320 narrowbody aircraft from IndiGo, the largest commercial jet deal ever. A Reuters report back in March said India’s IndiGo was considering the Boeing 737 Max as an alternative after exclusively buying narrowbodies from Airbus until now.
Commercial aviation continues to pick up the pace after the severe pandemic that hit air traffic. Boeing’s new 2023 Commercial Market Outlook, released Sunday, estimates global airlines will require 42,595 new jets through 2042 — 1,425 more than it had forecast last year.
Boeing shares lost 0.4% to 211.60 in trading today, falling for a second day in a row. BA shares topped a buy point of 221.33 from a flat base last week but have struggled to advance.
Airbus shares fell 1.3% on Wednesday, snapping several days of gains. EADSY stock recently managed an entry of 34.85 and is in buy territory.
Challenging aerospace supply chain
Aircraft manufacturers are scrambling to ramp up production to meet strong demand from airline customers. Their supply problems continue, including for Boeing and Airbus’ top sellers – the 737 Max and A320neo, respectively, both narrow-body aircraft.
Suppliers GE and RTX are working to fix durability issues with their respective Leap and GTF engines for these jets.
During the air show this week, GE and RTX highlighted improvements to the Leap and GTF programs. RTX also announced a rebranding from its former name, Raytheon Technologies.
Pratt & Whitney, a jet engine unit of RTX, said it is seeing “solid progress” in its aerospace supply chain, Reuters reported on Wednesday.
But the supply chain is stabilizing at “weak levels,” Bank of America analyst Epstein warned in his Wednesday note to clients.
The Covid-19 pandemic and the Russia-Ukraine war caused major supply bottlenecks. Lack of raw materials and labor is still a challenge.
GE shares rose 0.8% to 104.88 on Wednesday after hitting a five-year intraday high on Friday. RTX shares rose 1.3% to 98.93.
Spirit AeroSystems (SPR), which makes fuselages for the Boeing 737 Max, was roughly unchanged at 29.56. The SPR share fell 4.4 percent on Tuesday.
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