Will Boeing (NYSE:BA) enter into a partnership with Airbus?

There was a time when Boeing (NYSE:BA) was one of the tech giants dealing with the defense industry, however, the business of this company is declining.

A number of countries all over the world are updating their air bases by introducing more and more fighter jets, but Boeing is losing all those contracts. The company lost a $7.7 billion deal to Lockheed Martin in the region of South Korea last year. It is important to mention here that the deal was for Boeing’s F-15 jets. Recently, the company lost another contract to Saab in the territory of Brazil. The total worth of the contract was recorded to be around $20 billion.

Coming to the country of Argentina, Boeing (NYSE:BA) is not even in the race for a new contract there, for Lockheed will win easily if the administration of Kirchner picks the partner of Lockheed, Korea Aerospace Industries.

It is not Boeing that is facing difficulties these days; its competitor, Airbus is also having a hard time. Airbus owns a large amount of shares in Eurofighter. Eurofighter lost a $9.8 billion contract last year. It is important to mention here that the contract was for United Arab Emirates planes. The UAE will probably seal the deal with Textron now. Airbus is thinking about closing down the production of its Typhoon jets by the year 2020.

Boeing’s F/A-18 is one of the biggest rivals of Typhoon, and the chances are that the production of F/A-18 will be shut down by the year 2016. The current situation of both Boeing (NYSE:BA) and Airbus is not going so great. Perhaps this is the reason why the market analysts are expecting these companies to strike a deal and work together in order to gain benefits.

Airbus and Boeing are redesigning and updating their fighter jets. Meanwhile, the United States Air Force is thinking about developing a new fighter jet belonging to the sixth generation. This new fighter jet will be replacing the F35 of Lockheed. Last month, when the executive vice president of Airbus for the Military Aircraft, Urena Raso, was question as to whether the company is interested in teaming up with some American airplane company in order to build and design a new fighter jet for a potential US Air Force bid, he replied with the words ‘why not?’ Market analysts are of the opinion that Airbus is seriously considering teaming up with another company in order to fill its technology gap. It is important to mention here that Boeing built its 5^th generation prototype quite a while ago, whereas, Airbus has not reached there yet.

Coming to the stock prices of Boeing (NYSE:BA), the company, on the last trading day of December 12, 2014, started its stocks at a price of $122.24 and closed at a price of $120.77, after hitting the highest price of $122.27. The company has a total market capitalization of $86.1 billion with a P/E (price to earnings) ratio of 17.26.