Monday, September 26, 2011

First Boeing 787 shipments should equal immediate boon for many parts suppliers

Boeing has at long last delivered its 787 Dreamliner to Air Nippon Airways -- three years late, and not without difficulties, but with the potential to become the first of thousands of planes produced. And as noted by Christopher Hinton writing for MarketWatch, though it may take years for the aerospace giant to recoup the costs of the Dreamliner's development and declare it profitable, many 787 supplier companies may expect a more rapid uptick in earnings.

“Part suppliers have better profit margins than the air framers and they had less development costs,” explained Michael Lew, an aerospace analyst interviewed by MarketWatch. “But the margins for suppliers are varying."

Lew added, "Materials suppliers...have better margins as their product is usually manufactured for one-time use -- that is, the life of the plane -- whereas engine suppliers are more dependent on aftermarket and margins could be lower.”

Full Article: First Boeing 787 a boost for parts makers (marketwatch.com)









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