Coming soon: More airplane orders for Boeing. Image source: EVA Air.
Boeing (BA +2.07%) has big plans for China. As my Foolish colleague Rich Duprey pointed out last month, the Seattle aerospace giant recently predicted that the Middle Kingdom will spend $1 trillion (with a "t") on new airplanes between now and 2034, and put 6,330 new jets in service. If Boeing's right, China's existing commercial air fleet will triple in size over the next 20 years.
But what about today?
Don't forget this other Asian market
China means big business for Boeing, which currently controls about 50% of the Chinese market for aircraft. This week, however, the big news is all happening in its neighbor, Taiwan.
Three months ago, if you recall, Taiwan played a starring role in one of Boeing's bigger airplane sales weeks of 2015, as Taiwanese airline EVA Airways placed an order for five Boeing 777 freighters to beef up its freight business. Valued at $1.5 billion, that deal accounted for nearly 10% of all 777s Boeing has sold so far this year, and it promises to increase the size of EVA's 777 fleet by 25%.
At the time, Boeing noted that EVA's purchase will make the Taiwanese airline "one of the largest 777 operators in the world." And now it's getting even larger.
Once more, with feeling
On Thursday, Boeing announced an imminent follow-on order from EVA, this time for two more 777s -- 777-300-ER models. Additionally, EVA will be buying two dozen units of Boeing's biggest 787 Dreamliner model, the "787-10." In addition to being "one of the largest 777 operators," EVA will also become "one of the first airlines in the world to introduce" the 787-10.
This latest deal is not yet final. As such, it hasn't yet been entered into Boeing's order book (which, in fact, shows no new orders booked in the past week). So far, EVA has only signed an "intent to purchase" the 787s and the additional 777s. But once the deal does finalize, Boeing calculates that these 26 aircraft will add more than $8 billion (at list prices) to the value of its order book. According to data from S&P Capital IQ, that's about 13% of the value of all the commercial airplane sales Boeing makes in a year.
Why Boeing hearts EVA
All told, Boeing now has firm or probable orders from EVA to deliver 15 777-300ERs, five 777 Freighters, and 24 787-10s -- all either leased or purchased directly from the manufacturer. These 46 aircraft in the pipeline promise to more than double the number of Boeing aircraft in EVA's fleet (which is already a majority-Boeing fleet), and they will grow the airline's total fleet to 110 aircraft -- a 72% increase in capacity.
That may not be enough to make EVA Boeing's biggest customer of the year, but it's definitely enough to make EVA Boeing's favorite customer of the week.
