Aug. 24, 2016: It’s a light week for relevant commentary from the US aerospace analysts.
Weekly Insight, Aug. 22, 2016
With 79 days to go, the November election is beginning to dominate A&D investor discussions, especially since both candidates just recently met with the Aerospace Industries Association. Slicing through the political rhetoric, we would view a Clinton victory in November as a neutral to modest positive for defense. We think Clinton will likely continue the policies of the Obama administration. We think a Trump victory would be very bullish for the defense group given the campaign’s strong statements regarding the need for increasing military spending to support a more assertive foreign policy. We would remain bullish on defense regardless of the election outcome.
|Boeing may be recommending that Pakistan International Airways (PIA) swap five B777-300ERs they have on order for 787s. If that swap occurs, it’s going to be more difficult for BA to achieve its target of 40 B777 orders this year in order to avoid another production rate cut. We think BA will have to reduce 777 production rates to 4/mo in 2018 and we see that potentially occurring as early as October.|
Below the Radar, Aug. 22, 2016
Business Standard reported Jet Airways deferred the introduction of the Boeing 787 to limit its widebody capacity addition. Order deliveries are now expected to begin in 2019 from the original year-end 2017 date.
Several media outlets reported Aeroflot will review whether to “transfer” its contract for 22 Boeing 787 aircraft to another carrier. According to Vedomosti, the Russian airline may transfer its contract to Rostec’s leasing company.
News Corp Australia Network reported Jetstar is working on repairs on several General Electric-made engines in its Boeing 787 fleet. The engine problem is reported to “trigger a mid-flight engine shutdown.” The carrier continues to investigate the cause of the issue.