Aerospace and defense giant, The Boeing Company’s (BA) newest and largest passenger plane, the 747-8 Intercontinental, smoothly completed its first flight. The flight was the first of a months-long test program that will log more than 600 flight hours. Boeing is planning to commercially launch the 747-8 plane by the end of fiscal 2011.
This new 747-8 model only retains the iconic shape of the first 747, but is by far more advanced than the initial 747s rolled out from Boeing’s factory. The latest from Boeing features cutting-edge breakthroughs in aviation technology, akin to the 787 Dreamliner, featuring new wings, a brand new body and engines. Consequently, the airplane would improve upon fuel efficiency by 16% and reduce carbon emissions by another 16%.
This ground-breaking model would furnish vastly superior interiors adding to the comfort of the passengers. The 747-8 Intercontinental would carry more passengers and cargo further and faster than any airplane of its class. The new engines would lower the sound emission by 30% compared to previous versions.
We believe this brand-new, next-generation airplane, capable of flying 467 passengers in three class configuration; will compete with A-380 of its international commercial airspace rival Airbus part of European aerospace giant EADS NV. Also in recent times the commercial airliner business has been witnessing higher competition with regional jet makers like Empresa Brasileira de Aeron (ERJ) and Bombardier Inc. joining the race.
The new airplane has already booked orders from airliners like Deutsche Lufthansa AG (DLAKY) and Korean Air. First commercial delivery of the 747-8 Intercontinental is scheduled for the fourth quarter of 2011.
Boeing is pinning its hopes on the 747-8 airplane to boost its Commercial Airplanes segment. In fiscal 2010, segmental revenue dropped 6% to $31.8 billion compared with 2009. A major reason for the drop was no deliveries on the 747 program due to the internal transition from the 747-400 to the 747-8.
Based in Chicago, Boeing designs and produces commercial airplanes, defense systems and civil and defense space systems.
Boeing has a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries, and also as one of the largest aerospace and defense contractors in the world. Its revenue exposure is spread across more than 90 countries around the globe.
The Boeing Company currently retains a Zacks #4 Rank (short-term Sell rating). Considering the fundamentals, we are maintaining our Neutral recommendation on the stock.
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