Boeing Gets $2.16B Order From Qatar Airways, Backlog Rises

The Boeing Company (NYSE:BA) announced that it has received a new order from Qatar Airways worth $2.16 billion. Per the order, Boeing will supply two 747-8 Freighters and four 777-300ERs (extended range) to the airline.

These orders for 747-8 Freighters will help Qatar Airways to further expand its cargo operations and serve more customers. This deal extends the business relationship of the two companies. Qatar Airways is one of the best airliner operating in the Middle East and its fleet includes aircraft from Boeing as well as from its arch rival, Airbus SE (OTC:EADSY) .

Qatar Airways, at present operates nearly 100 airplanes manufactured by Boeing and has placed orders in excess of 100 airplanes from the latter.

Boeing’s Backlog

Boeing has delivered 3,482 commercial airplanes to its customers in the last five years. Despite this, its total commercial airplane backlog at the end of second-quarter 2017 was $424 billion, up from $417 billion at the end of first quarter. The commercial airplane backlog at the end of August 2017 was 5,665 airplanes.

Boeing, with its current production rates, will require more than five to six years to cover up its current backlog. This actually shows the willingness of the customers to wait for the high quality airplanes the company offers to its clients.

As of Sep 19, 2017 the company received net orders of 433 commercial airplanes and the continuous flow of orders is further expanding its backlog.

Development in Defense Space

Apart from presence in commercial market, Boeing is a major operator in the defense industry.

Recently, the Senate approved a $700 billion National Defense Authorization Act, which provides necessary funding to the U.S. Military to carry out activities in homeland and overseas. The bill authorizes $640 billion for national defense spending and $60 billion for Overseas Contingency Operations.

The defense expenditure for fiscal 2018 is expected to exceed fiscal 2017 levels by nearly $83 billion. The defense spending approved by the Senate is higher than what President Trump had requested for.

In addition to Boeing, the higher defense spending will benefit companies like Lockheed Martin Corporation (NYSE:LMT) and Northrop Grumman Corporation (NYSE:NOC) .

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