Boeing Co. (NYSE: BA) Lost $13 Billion Contract

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By Thomas Copeland on November 21, 2014 Company

According to the latest news, Boeing Co. (NYSE: BA) has lost one of its most important orders from Delta Air Lines Co (NYSE:DAL). It is important to mention here that the company was really looking forward to this contract as it would mean lots of profits for Boeing Co. The order was regarding the 50 wide body air planes with dual aisle. The company was expecting to outnumber Airbus’ jets. Rumors have it that this contract was worth $13 billion, and it included 25 Airbus A330-900neos and 25 A350-900s. These figures and deal price was revealed by Reuters- a financial and investment news company- and Leeham, a consultancy firm for aircraft industry, and so the chances are that the news is true.

Boeing Co. (NYSE: BA) had initially proposed to sell Delta Air Lines Co (NYSE:DAL) its 777-200LRs and 787-9.The company was planning on selling around 5 of its 777-200LRs jets to Delta Air Force because the production of 787 has not started yet. Boeing Co. (NYSE: BA) would have filled its production gap if it had gotten the contract from Delta Air Line, for the company’s production was going quite slow due to the transitions to its 777X from the previous 777 Classic.

According to the news company, the most important factor which took the contract away from Boeing was the delivery dates. Both the companies could not agree on a date. The 787-9 delivery dates that Boeing gave to Delta were not suiting Delta’s requirement. The Airbus, on the other hand, was able to make adjustments and accommodate Delta’s schedule. Airbus promised Delta to deliver the A350s earlier than the sealed date. The reports are just a rumor as of yet because none of the companies has agreed to comment on the matter.

According to the reports revealed by Leeham, Delta is planning on making an international hub in the region of Seattle. The company will use A350 in its flights over the region of Pacific. As for the A330s that it will get from Airbus, Delta Air Line plans to use them for its routes over the region of Atlantic.

Delta Air Lines Co (NYSE:DAL) currently has around twenty-one A330-300s and eleven A330-200s in its stock. But that does not mean that the company dislikes Boeing; it has ten 777-200LRs Boeings and eight 777-200ERs.

Coming to the stock prices of Delta Air Lines Co (NYSE:DAL), the company, on the last trading day of November 20, 2014, started its stocks at a price of $44 and closed at a price $43.96, after hitting the highest price of $44.64. The company has a market capitalization of $37.31 billion with a P/E (price to earnings) ratio of 3.82.

The stock prices of Boeing Co. (NYSE: BA) started at $130.94 and closed at $131.70, after hitting the highest figures of $132.40. The intra-day range for the company’s stocks was recorded to be from $130.71 to $132.40. As far as the market capitalization of Boeing Co. (NYSE: BA) is concerned, the figures are recorded to be at $93.7 billion.