The aircraft business is performing strongly alongside expanding demand for semiconductor-related components, with Boeing's production expansion providing a tailwind. Activity by Japanese companies in aircraft components and leasing is cited as a factor supporting the market.
As reported by Nikkei Veritas, aircraft-related demand is providing a tailwind for corporate earnings against the backdrop of a modest decline in the Nikkei Average, with Boeing's production recovery supporting the afternoon session. Alongside sales of semiconductor-related components and materials, the aircraft business is attracting attention as a factor behind upward earnings revisions.
Boeing plans to raise 737 MAX production from 42 aircraft per month to 47 aircraft per month from the July–September quarter onward, while its total order backlog has exceeded 6,800 aircraft. It was also noted that it is expected to take a long time to clear the 737 MAX backlog.
European aircraft manufacturer Airbus is in a similar position, with an order backlog exceeding 9,000 aircraft, and companies are moving to capture expanding global demand for air travel. Japanese companies, meanwhile, are expanding their aircraft leasing businesses through such moves as Itochu Corporation's investment in its leasing subsidiary and ORIX Corporation's acquisition of used aircraft components. An increase in airport development projects and growth in sales of components and entertainment systems by various companies have also been observed.
Among overseas companies, GE Aerospace and Howmet Aerospace have seen their share prices rise sharply, while Boeing and Airbus have been described as relative laggards. If Boeing and Airbus make progress in clearing their backlogs, this could lead to higher profits and potentially prompt a reassessment of their valuations in the stock market. Some Japanese companies with aircraft-business-related stocks are also expected to contribute to earnings going forward, given their close ties with the defense industry.