By Geoffrey Thomas
Published Sat Oct 19, 2024
Thousands of people entrust their lives to Boeing daily. In the overwhelming majority of cases, Boeing has gotten us there safely, many times. We therefore trust Boeing, not even advertising is needed for this brand.
These are the opening remarks of an opinion piece from Curonian Research published on seekimgalpha.com . We publish the first part of the piece below and a link to read the balance at the bottom of the story.
All of us know what Boeing is, all of us have flown their planes dozens of times, and all of these trips have gone mostly smoothly, otherwise, you would not be reading this.
Boeing stands for safety and reliability. This brand is entrenched by decades of personal experiences, with hundreds of millions of safe passages (in fact many, many billions) completed.
We were conditioned from childhood to feel safe in these sky-piercing 'metal tubes' manufactured by Boeing.
We remain attached to the products that give us great initial experiences, even if we grow weary of them eventually.
Most of us are also so accustomed to the safety provided by Boeing, to the point that we do not appreciate it a great deal these days.
The brand's strength keeps customers coming back even when some of its products disappoint.
There have been crashes and, unfortunately, there will be more. But the overwhelming majority of us had a safe experience. Boeing will maintain a dominant position in the commercial aviation industry despite all the recent setbacks. We will continue trusting Boeing planes.
The strength of the Boeing brand is unrivalled. The current issues present a unique opportunity to invest in this high-quality business. Boeing is currently trading near the lows, but it is as strong as before.
Boeing is going through a rough patch, but sales will recover
The current issues of Being were well covered by the media and there are plenty, to be honest. Production delays and quality issues have affected the 737 Max, 787 Dreamliner, and 777X aircraft programmes. At the moment labour disputes are creating added delays, while the defence division is struggling with cost overruns.
The labour strike is costing Boeing more than $1 billion per month while the defence division is also draining cash. The company is now planning to raise $10 billion worth of equity to improve its financial position.
Baron Rothschild famously said: "buy property when there's blood in the streets", I guess he would also be pondering the idea of investing in Boeing now.
Boeing commercial aircraft will continue being demanded worldwide due to their decades-long track record for safety and reliability.
Air traffic passenger volumes continue to expand globally, driven by middle-class and population growth in China, India and Southeast Asia. Global passenger volume is expected to grow by 3.8% annually over the next 20 years according to International Air Transport Association (IATA).
Despite the operational issues, Boeing still has more than 7 years' worth of order backlog. The company's products are still highly desired, and demand is growing.
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