By: Carter Copeland
Boeing continues to move aggressively to maximize their market position: Over the last several years, there has been a notable acceleration in BA’s forward-leaning posture when dealing with most stakeholders of significance. Whether it’s suppliers, competitors, customers, governments, or labor, Boeing is simultaneously pushing on numerous fronts to sustainably increase longer-term returns. We see the exploration of a potential deal with ERJ as just another example (along with internal cost initiatives, “partnering for success”, changing contract terms, and the C-Series trade case) of BA taking very seriously the commitment to maximize each and every market opportunity. Despite the clear financial benefits discussed below, we’d encourage BA investors to look past potential accretion numbers and forget about how an ERJ deal might eat into your buyback assumptions (there’s more than enough cash to go around); there are two key takeaways here: 1) as the company continues to aggressively push on numerous fronts, further BA shareholder value creation is undeniable and 2) life likely isn’t getting easier for the suppliers.