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Summary
- Airbus raises aircraft production target as the aviation industry starts to recover.
- GE’s joint venture with Safran SA supplies engines to Airbus’ A320 family.
Stocks of General Electric Company (NYSE:GE) and Boeing Company (NYSE:BA) rose as much as 7.4 percent and 4.6 percent, respectively, in Thursday’s trading.
The stocks rallied after Airbus announced plans to raise production targets amid signs of recovery from the pandemic impact on airline traffic. The European aerospace company anticipates the commercial aircraft market to recover to pre-pandemic levels between 2023 and 2025.
Airbus plans to increase the monthly production rate of an average A320 family to 45 aircraft in the fourth quarter of this year and raise it further to 64 aircraft by the second quarter of 2023. The company eyes a production rate of up to 75 aircraft per month by 2025.
General Electric’s joint venture with Safran Aircraft Engines, CFM International, supplies the CFM56 engine that powers the A320 family. According to the CFM website, its CFM56-5B engines to power nearly 60 percent of the A320 family ordered.
Airbus’ plans to increase production could be boost to General Electric’s aviation unit, which took a severe impact from the pandemic.
Recently, GE reported its first-quarter results, in which revenue from its aviation unit plummeted 28 percent to US$5 billion as the impact of the pandemic on the aviation industry continued. The segment’s profit fell by 36 percent to US$641 million during the period.
Meanwhile, the Federal Aviation Administration said on Thursday that Boeing would pay US$17 million in penalties to settle production issues. The FAA found that Boeing fitted uncertified sensors on 759 Boeing 737 MAX and NG aircraft.
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Source: Pixabay
Stock Performance
General Electric has a market capitalization of US$120.06 billion. Its stock rose around 32 percent year to date and gained approximately 91 percent in the last one-year period. General Electric has a 52-week trading range of US$5.93 to US$14.42.
Boeing has a market capitalization of US$146.51 billion. The stock grew 19 percent this year and rallied over 60 percent in the last one year. The shares traded in the range of US$141.58 to US$278.57 in the 52-week period.
Boeing’s stock closed at US$250.70 on Thursday, up 3.87 percent.
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