BA Stock: This Could Be Huge for The Boeing Company

Boeing Company StockThe Boeing Company Has Completed Its Design of the “787-10” Early

The Boeing Company (NYSE:BA) soared back toward a three-month high of $149.00 per share on the day after announcing its launch of the Boeing “787-10,” the largest model of the Boeing “Dreamliner” family. Boeing also unveiled a second partnership in Canada concerning the use of forest debris to produce biofuel, advancing developments in alternative fuels in order to address demand from airlines trying to offer greener services. Owners of BA stock should take notice.

This Is the Next Big Thing for Boeing

Followers of Boeing’s stock will appreciate the significance of the earlier-than-expected completion of the 787-10, remembering the delays that marred the launch of the first 787 Dreamliner model. It was delivered to the company’s launch customer, ANA Airlines, after a delay lasting a few years. Boeing certainly appears to have resolved all major issues affecting production of one of the most advanced airliners in the world.

Therefore, the Boeing 787-10 will begin production next year, as planned and announced by the Chicago-headquartered company on December 3, 2015. (Source: “Design Milestone Clears Boeing 787-10 for Production,” Aviation Week, December 3, 2015.)

The 787-10 was completed two weeks ahead of schedule and Boeing and its subcontractors have the green light to start preparing parts and tools required for assembly. If the Boeing 787-10 continues to be developed on schedule, then the first units will fly in 2017, for delivery in 2018.

Why is the Boeing 787-10 significant to Boeing’s performance?

The 787-10 is a stretched version of the 787-9, and it is designed to meet a specific market need for a long range, over 11,910 km (some 7,000 miles); however, compared to the 787-9, Boeing has managed to optimize the design such that 95% of the 787-10’s design comes directly from the 787-9, reducing complexity, costs, and risks throughout the production chain. (Source: Ibid.)

The new variant of the 787 will be able to meet airlines’ needs for more than 90% of all long-haul routes, achieving new fuel consumption records, 25% lower compared to the aircraft it will replace and 10% compared to what the competition will offer in the future.

So far, Boeing has received 164 orders for the 787-10 from nine airlines, representing 14% of all purchased Dreamliners.

At the end of November, Boeing struck a deal with Taiwan’s Eva Airways, considered the largest single order placed from Taiwan: 24 units of the 787-10 Dreamliner and two 777-300ERs, valued at more than $8.0 billion. Boeing also said that the Chinese aircraft-leasing company BOC Aviation had passed an order for 22 737s, including 11 737 MAX 8 models. (Source: “Boeing, EVA Airways finalize Taiwan’s largest jetliner purchase,” Aerospace Manufacturing and Design, November 27, 2015.)

Just weeks before that, Boeing secured a historic order for 300 planes from Chinese airlines for a total of $38.0 billion, a new record in the civilian aviation sector. The company said it would also open its first plant in the country, posing a strong challenge to Airbus in the lucrative Chinese market. (Source: “Boeing in Deal to Sell 300 Jets to China,” The Wall Street Journal, September 23, 2015.)

Boeing and Biofuel Alternatives

However, the overall Boeing has an additional advantage that will help it draw in more customers. Boeing has announced a partnership with the University of British Columbia and SkyNRG to test the possibility of converting sawdust and other wood waste into biofuel suitable for powering a jet engine. (Source: “Boeing may convert forestry waste into biofuel,” Gizmag, December 3, 2015.)

Boeing said that Canada has long used the waste to produce briquettes used in the production of electricity. Air Canada, which operates several Boeing aircraft including the 787, is one of the participants in the study.

The researchers and industry will try to establish the possibility of using this waste to produce a new and sustainable biofuel. A study sponsored by Boeing has already demonstrated that biofuel from forest waste would be able to supply 10% of the annual demand for aviation fuel in British Columbia, creating advantages for airlines operating in carbon credit or carbon tax environments to take advantage of these.

Biofuel is hardly something new for Boeing, which has been at the forefront of research in the field, being involved in active projects to produce biofuel for jets in the United States, Brazil, China, Australia, Europe, the Middle East, South Africa, and Southeast Asia. Boeing flew a 787 Dreamliner across the Pacific Ocean in 2012, propelling it using a mix of regular jet fuel and biofuel derived mainly from used cooking oil, opening a commercial partnership with Commercial Aircraft Corp. of China (COMAC) to produce the biofuel mix in a pilot plant in China. (Source: Ibid.)

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