The Boeing Company (BA) has received an order worth $895 million for three additional 777-300 Extended Range (“ER”) airplanes from Angola flag carrier TAAG Linhas Aereas de Angola. The contract also includes rights to purchase three additional 777-300ERs.

The Boeing 777-300ER entered into service in May 2004. It is one of the long-range airplanes developed by Boeing to provide more flexibility to the airline companies and ensure non-stop services for their customers. The aircrafts, with twin-engine efficiency, can accommodate 365 passengers and cover a range of 7,930 nautical miles. The other one is 777-200LR Worldliner. Both the long-range airplanes use General Electric Company‘s (GE) engines, as well as extended and raked wingtips.

Currently, TAAG operates three 777-200ERs and two 777-300ERs from Luanda, Angola to cities such as Lisbon, Beijing, Dubai, Sao Paulo and to Rio de Janeiro. It is focused on expanding its services by acquiring high-technology airplanes, improving its booking system and instituting a customer loyalty program. It plans to expand its network by incorporating the new airplanes to its existing fleet.

The aircraft seems to be in great demand. In February this year, the company had also received an order for 10 Boeing 777-300 ERs from China Southern Airlines, intent on expanding its capacity to meet the growing demand in the Asia-Pacific region and China. Pakistan International Airlines had also ordered five 777-300ER (extended range) airplanes worth $1.5 billion at list prices. The order also included the purchase rights for five additional aircrafts.

We believe that Boeing is among the best-positioned in its sector due to its balanced exposure to commercial aircraft and defense equipment. Overall, we expect the growth momentum to be maintained by an order backlog, planned production rate increases and a globally diversified customer base.

However, near-term headwinds for the global airline industry along with expected cutbacks in the U.S. defense budget are a matter of concern.The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Based in Chicago, Boeing Company is a premier jet aircraft manufacturer and one of the largest defense contractors in the U.S. The company’s customers include domestic and foreign airlines, the U.S. Department of Defense, the Department of Homeland Security, the National Aeronautics and Space Administration, other aerospace prime contractors, and certain U.S. government and commercial communications customers.

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