The Boeing Company (BA) has entered into an agreement with United Continental Holdings Inc. (UAL) whereby BA will modify United Airlines’ 777 fleet with a Performance Improvement Package to perk up fuel efficiency and reduce emissions.

Boeing (assuming $100 per barrel crude oil prices) estimates that installing the package on 52 planes in the 777 fleet will reduce fuel spending per airplane by about $0.2 million annually. The 777 Performance Improvement Package improves the airplane’s aerodynamics through a software change to enable a drooped aileron, a ram air system improvement and installation of improved wing vortex generators.

The Boeing 777 is a long-range, wide-body twin-engine jet airliner with seats for over 300 passengers. The original 777-200 model was launched in 1995, followed by the extended-range 777-200ER in 1997. The stretched 777-300, which is 33.3 ft longer than other 777 series planes, was inducted in 1998.

The longer-range 777-300ER and 777-200LR variants entered service in 2004 and 2006, respectively. Boeing also introduced a freighter version titled the 777F in 2009. Both longer-range versions and the freighter feature General Electric Company’s (GE) GE90 engines. Other models are equipped with either General Electric’s GE90 or United Technologies Corporation’s (UTX) Pratt & Whitney PW4000 engine.

In the recently reported fourth quarter of 2010, Boeing’s Commercial Airplane segment saw a 5% fall in deliveries to 116 units. This was mainly due to a lower number of 777 airplanes deliveries. Lower airplane deliveries pulled down revenue 11% to $8.2 billion.

Boeing in recent times is focused on increasing its 777 series production rate. Earlier this month the company raised its 777 production rate to 7 aircraft per month from the earlier rate of 5 aircraft per month. Looking forward the company plans to raise production to 8.3 aircraft per month by the first quarter 2013.

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.

 
BOEING CO (BA): Free Stock Analysis Report
 
GENL ELECTRIC (GE): Free Stock Analysis Report
 
UNITED CONT HLD (UAL): Free Stock Analysis Report
 
UTD TECHS CORP (UTX): Free Stock Analysis Report
 
Zacks Investment Research