Orders for new airplanes have been coming relatively thick and fast since June’s Paris Air Show. The two major manufacturers, Boeing Co. (NYSE: BA) and European Aeronautic Defense & Space Co. (OTC: EADSY), are both taking new orders in significant numbers. Could Boeing really be turning around?

The latest boost to airplane makers is a firm order for 50 new planes, 25 from each maker, with the possibility of 60 additional planes from Air France-KLM Group. Air France currently has nearly equal numbers of planes from each maker in its fleet: 191 Airbus planes and 188 Boeing planes. That must be galling to Airbus, which builds most of its airplanes in France.

From Boeing, Air France has ordered 25 of the company’s new 787 Dreamliners, the first of which is scheduled to be delivered this month after more than three years of delay. The airlines also has an option for an additional 25 Dreamliners. No delivery schedule will be released until later this year.

Air France’s order on Airbus included 25 of the A350-900, a new line of wide body planes capable of carrying up to 350 passengers on flights of more than 9,750 miles, and a competitor to Boeing’s 777 and larger 787s. The A350-900 is not scheduled for commercial delivery until mid-2013.

The new orders are particularly good news for Boeing after all the negative comments the company has received for the delays in its 787 program. The company claims more than 800 orders for the new planes from 56 customers — Air France would be number 57.

Could Boeing finally be turning itself around after years of really lackluster performance? The company’s share price hit an all time high of over $100/share in mid-2007 before plummeting to just $30/share in early 2009. The stock has more than doubled since then though it is still 19% below its 52-week high of near $81/share.

The stock’s forward P/E multiple is 12.48, and the price/book ratio is pretty formidable 10.06. The forward dividend yield is 2.70%. The median price target is $86/share and since early 2010, most ratings actions have been positive. That likely accounts for the high price/book value.

One could argue that analysts have priced in just about all the good news that Boeing can be expected to get for the next couple of years and the only smart play here is to bet that the company will stumble again. Short interest in the company is above 12 million shares, the highest its been since last October. The days to cover ratio is currently 1.81.

Boeing’s troubles with its union is just one issue that could upset this new burst of optimism about the company. The company’s new non-union Dreamliner plant in South Carolina has been challenged by the National Labor Relations Board and a decision on the company’s appeal should be out before the end of this year. No matter which side prevails, further appeals could drag the dispute out for years. None of this is good for Boeing as it works to streamline its manufacturing process for the 787 Dreamliner.

Now that the company has nearly delivered on its latest Dreamliner promise, it needs to settle its labor problems and get in position to continue battling with rival Airbus and other aircraft makers looking to duke it out in the 737 space, which has long been Boeing’s bread and butter. One can be hopeful, but the company’s management fouled up the 787 program and the relatively good news that has come Boeing’s way recently could have been achieved at least two years ago.

Boeing is getting credit now for now screwing things up. How long can that last? Only until the next foul-up.

Paul Ausick

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