Boeing (NYSE:BA) my my my. Despite recent news reports and market commentary Boeing is doing rather well. Earnings and revenues are up. Deliveries are still strong. Margins are improving. Passenger air travel will increase driving demand for fuel-efficient new aircraft.
Everything is peachy keen good. No worries. Just buy a little bit more. Yes all the metrics everyone is talking about are positive. so lets talk about the 800 lb gorilla sitting in the room that can disrupt everything.
Oil or more precisely jet fuel JP4 if I have the nomenclature correct.
If oil jumps and stays up the cost or air travel will increase. People will cut back on air travel. air lines will cut back on order purchases etc etc etc.
So its nice to follow the Boeing story. The 787 Dreamliner with its carbon body that flexes on take off is very sexy.
But it comes down to the price of oil which is a geo-political risk that even the most astute and sophisticated businessman cannot manage around.
So yes the new fleet is more fuel-efficient. But a terrorist can drive up the price of oil faster than an engineer can wring fuel efficiency out of the technology.
George Gutowski writes from a caveat emptor perspective.