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Another Record Year for Plane Makers

By Motley Fool Staff – Updated Feb 12, 2018 at 10:26PM

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The airlines are booming, and Boeing and Airbus are putting out record numbers of deliveries.

It's no secret that airlines have recently shucked off their "uninvestable" stigma. In this Industry Focus: Energy segment, host Sarah Priestley and Motley Fool contributor Adam Levine-Weinberg talk about delivery trends for Boeing (BA -3.39%) and Airbus in 2017, and what the future looks like for these two plane makers.

A full transcript follows the video.

This video was recorded on Feb. 8, 2018.

Sarah Priestley: So today, we're going to be talking about the big two plane makers, Boeing and Airbus. Together, these two make up the majority of the $140 billion industry, which is just huge. The market is pretty fascinating right now thanks to a few factors: growing demand from the Asia-Pacific region, low interest rates. As such, it's enjoying really high demand, and this is creating all kinds of pressure on the manufacturers and their supply chains. So, by the end of the decade, Airbus and Boeing have to build 30 more planes annually to meet existing orders. And this is the industry's steepest production increase since World War II, which is incredible. How did they hold up in 2017, Adam?

Adam Levine-Weinberg: Last year, we did see another record year of output for both companies. During 2017, Boeing surpassed Airbus in terms of deliveries, and that was the sixth straight year that Boeing won in the delivery race. But both companies, as I said, did beat records. And it looks like 2018 is setting up to be another year of record output for both companies. Also, looking ahead, the orders for the year were very strong, but still below the peak levels that we saw back in 2012 and 2014, when you had really, really high fuel prices forcing airlines to put in big orders for next-generation, more fuel-efficient planes.

Adam Levine-Weinberg has no position in any of the stocks mentioned. Sarah Priestley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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