Boeing Picks Up a ‘Buy’ Recommendation From an Old Foe at Airbus
(Bloomberg) -- Boeing Co. received an endorsement from an unlikely source: John Leahy, Airbus SE’s retired sales supremo who rang up over $1 trillion in aircraft deals over a long career, largely at the expense of the the U.S. aerospace giant.
Leahy is famous for ribbing his long-time rival. But after being put on the spot by a fellow aviation luminary at an industry conference Thursday, Leahy said he would buy Boeing shares.
The manufacturer is a good long-term investment even after its stock has more than doubled since early 2016, he said, because it’s one of only two major planemakers amid voracious demand for air travel. The same holds true for Airbus, he said, after a sales bonanza that has left the companies with overstuffed order books well into the next decade.
“What multitrillion-dollar industry is controlled by two players, with high barriers to entry?” Leahy said in response to a question from Air Lease Corp. Chief Executive John Plueger at an Airline Economics conference in New York.
Boeing fell 1.8 percent to $358.79 at 2:07 p.m. in New York. The shares advanced 24 percent this year through Wednesday, the fifth-biggest gain on the 30-member Dow Jones Industrial Average.
Leahy predicted that Boeing and Airbus would continue their commercial-aircraft duopoly for another two decades. Rivals from China to Russia are trying to break the stranglehold by developing their own jetliners.
Still, Leahy couldn’t resist taking a shot at Boeing’s proposed new midrange aircraft, nicknamed the 797 by observers. He predicted that the company’s board would ultimately approve plans to develop the all-new plane -- but that large airline customers would balk at the long-term services contracts Boeing is counting on to close a tough business case.
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