Tuesday, March 8, 2011

Boeing (NYSE:BA) Secures $10 Billion Chinese Contract

Boeing Co (NYSE:BA) has been awarded contracts with two Chinese airlines valued at $10 billion. Over the next five years, estimates are the Chinese will acquire over 2,000 more aircraft to serve the rising travel market in the country.

According to Wang Changshun, vice minister of the Civil Aviation Administration of China, China will order about 1,100 new transport aircraft and another 1,000 general aircraft during that time.

Andrew Orchard, an analyst at RBS in Hong Kong, noted "Boeing and Airbus have a backlog of something like 7,000 planes in total. Right now they are just clearing the backlog of deliveries and so as these new planes come into the industry, that will impact supply and capacity."

Boeing also landed another deal with HNA Group, parent of Hainan Airlines Co Ltd (Shanghai:600221.SS), which signed a memorandum of understanding with Boeing to acquire 38 aircraft, including six 777s and 32 787s.

Boeing was trading at $72.34, gaining $1.46, or 2.06 percent, as of 11:35 AM EST.

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