A new plane might soon conquer the skies, which news might excitement investors that were previously wary of a brand that seemed to be ageing before their very eyes. Boeing (ticker: BA) commercial airlines chief Stan Deal told the Royal Aeronautical Society that the company was in the developing stages of crafting a new plane. Early stages could involve questioning customers about possible interest in a new aircraft and thinking through questions about plane size and new design features.
This news comes after Boeing faced a tough three years; however, aircraft orders are continuously rising, and the 737 only recently returned to service across the globe. In October last year, the company registered a loss of 60 cents per share on revenue of $15.3 billion.
A new plane would add a touch of excitement to Boeing and possible influence the stock. Aerodynamic Advisory’s Richard Aboulafia commented that a new 757- sized plane was “exactly what Boeing needs to do.” Credit Suisse analyst Robert Spingarn also made the same point in a separate conversation.
A 757 jet would carry roughly 200 to 250 passengers and compete with larger versions of Airbus (ticker: AIR.France) A321 NEO. One of the key challenges for both Airbus and Boeing when developing a new plane in which new technologies to adopt to make a new product cost less and therefore be an attractive option in an already competitive market.
With this plane, the new technologies incorporated could be an all-new engine or wing design. The design could also incorporate new, lighter materials such as carbon composites. Each new technology adds a separate layer of risk as well as a potential reward of lower costs that are difficult for competitors to replicate.
This news appears to be timely, especially since Boeing stock could actually use a boost. Shares have dropped about 9% over the past three months. The S&P 500 and the Dow Jones Industrial Average are both off roughly 6% and 4%, respectively, over the same time span.
Boeing stock fell 6% in 2021, disrupted by problems with manufacturing as well as painfully persistent problems with the pandemic. The company’s fourth-quarter results fell short of analysts’ expectations as the company recently saw charges on its 787 Dreamliner and KC-46 programs. The company reported a $7.69 per share loss as revenue dropped 3% to $14.79 billion. Fact Set analysts earlier projected a loss of 36 cents per share on earnings of $16.54 billion.
According to Boeing, the loss is largely attributed to the company taking a $3.5 billion pre-tax non-cash charge on the 787 Dreamliner program. The delay in deliveries amid negotiations with regulators is “taking longer than previously expected,” Boeing explained in an earlier statement.
Analysts and Investors alike will be watching closely to see how the market will react to information about the new aircraft, especially much closer to its reveal in the future. Still, for now, a company with a such a long history will be admired for attempting to stay fresh amidst the fast-paced and highly dynamic world.