For nearly a year, we've waited with bated breath, wondering whether Boeing
Back in August, we discussed Rosavia's gambit to extract price concessions from Boeing by starting a bidding war between it and archrival Airbus. Borrowing a tactic previously employed by UAL
At the time, I argued that Boeing shouldn't take the bait. I thought Rosavia's stated intention of nabbing planes for under $50 million a pop meant Boeing would have to dive far below list price on its Boeing 737 offerings in order to snare the deal, crimping profit margins.
Now I'm not so sure.
When Russia hands you lemons, make lemonade
I'm still suspicious of the terms of this deal. While it's great to hear that Boeing beat Airbus to win the contract (even despite the Airbus's now-depressed-Euro prices), I still fear that the company may have sacrificed too much in profit margin to win the deal. But even if this deal turns out to be bad for Boeing, it could be very good for America, and for investors in Boeing's suppliers.
Companies from Honeywell
So while I'll reserve judgment on just how good this news is for Boeing itself, it does appear to be bad news for EADS/Airbus. Best of all, this looks like a great week to own shares of Boeing (suppliers).