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Major order placed for Boeing planes

Article By: ,  Financial Analyst
January 21, 2014 9:15 AM

General Electric's aircraft leasing and financing department has placed an order for dozens of new aircraft from Boeing in a deal worth $4 billion (£2.8 billion) at list prices.

The sale gets 2014 off to a flying start for Boeing after it recently announced it delivered a record number of planes over the course of 2013.

GE Capital Aviation Services (GECAS) confirmed that the purchase of the planes comes as the firm makes an attempt to be more energy-efficient.

Norman CT Liu, chief executive of GECAS, explained that more fuel-efficient planes are needed if the company's clients are to be able to compete in the competitive marketplace.

GECAS has, in total, placed orders for 95 units of 737 MAX 8 airplanes from Boeing, as well as 387 of the next-generation 737-800 jets. This means that it is now the biggest buyer of the two models in the leasing industry.

Stocks down

After news of the deal broke, the share price of Boeing was slightly lower in after-hours trading today (January 21st), although stocks rose by 0.18 per cent in trading yesterday.

The announcement by GECAS comes only a few days after Airbus confirmed that it had also celebrated a record-breaking year in 2013, although it was not quite as successful as Boeing.

The company's commercial director John Leahy said losing out to the rival company "doesn't matter to us at all". He added:  "I think we're happy with what we've got. It's a duopoly, with a 50-50 split here. I don't really care if they have two more airplanes or we have two more."

A company record of 626 planes were delivered by the firm over the course of 2013, with 93 different clients signing up to take aircraft, including more than a dozen who did so for the first time ever.

The share price of Airbus is broadly flat in the early stages of trading today, with stocks 0.07 down on the Paris exchange at 08:20 GMT this morning.

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