Ethiopian Airlines to acquire 84 new planes in expansion push

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Ethiopian Airlines is set to significantly expand its fleet with the purchase of 84 new aircraft from Boeing (NYSE:BA) and Airbus, as announced by CEO Mesfin Tasew today. This move is a part of the airline's Vision 2035 Strategic Roadmap, aiming to establish itself as a global aviation leader. The order consists of a mix of 67 Boeing and 17 Airbus planes, which will be added to their existing fleet of 140 passenger aircraft. This expansion is expected to bring Ethiopian Airlines' total fleet size to 271 by the year 2035.

The strategic acquisition is designed to replace aging models and boost the airline's international market presence. By enhancing operational efficiency and extending route coverage globally, Ethiopian Airlines envisions a significant growth trajectory.

In related industry news, during today's Dubai Airshow, Boeing secured a deal with flydubai for thirty 787-9 Dreamliners. This contract will support flydubai's development of new routes and increase capacity on existing ones. Sheikh Ahmed bin Saeed Al Maktoum recognized flydubai's role in reinforcing Dubai's status as an international air transit hub.

Flydubai's CEO Ghaith Al Ghaith praised the operational efficiency and passenger appeal of the Dreamliner series, which can carry 296 passengers over distances up to 14,010 km. With an existing all-Boeing 737 fleet and more on order, flydubai is preparing for anticipated network expansion. Boeing representative Stan Deal noted that the Dreamliner aligns well with flydubai’s growth plans and offers passengers the unique "Dreamliner effect."

The Middle East's aviation market is forecasted to double its demand for planes in the next two decades, particularly widebody models, due to its crucial role in connecting international flights.

InvestingPro Insights

In light of Ethiopian Airlines' expansion strategy, it's worth noting some real-time data and tips from InvestingPro. For Boeing (BA), revenue growth has been accelerating, a fact that aligns with Ethiopian Airlines' ambitious growth plans. However, InvestingPro Tips also highlight that Boeing is currently trading at a high EBITDA valuation multiple and has been flagged as being in overbought territory. Investors should keep these factors in mind when considering the company's stock.

Airbus (EADSY (OTC:EADSY)), on the other hand, has shown a high return on invested capital and holds more cash than debt on its balance sheet, according to InvestingPro Tips. This financial stability could be a factor in Ethiopian Airlines' decision to include Airbus in their fleet expansion. The stock of Airbus generally trades with low price volatility, which might appeal to more risk-averse investors.

InvestingPro Data reveals that Boeing's Market Cap stands at 125.86B USD, with a negative P/E Ratio of -44.26. Meanwhile, Airbus has a Market Cap of 113.94B USD and a P/E Ratio of 25.91. Both companies have shown significant revenue growth in Q3 2023, with Boeing at 23.34% and Airbus at 14.68%.

It's worth noting that InvestingPro offers many more tips and data points for subscribers, now available at a special Black Friday discount of up to 55%. This could be a valuable resource for those interested in the aerospace and defense industry, or investing in general.

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