India and Iran Give Airline Manufacturing a Lift

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SpiceJet Plane Approaching Runway           

I saw an interesting headline today, "SpiceJet in deal to buy 205 Boeing planes." What I found interesting about this was the fact that SpiceJet is an airline from India.

We have all been reading about the removal of cash currency from the nation and the complications of daily life for many living in that nation. To see a company from India signing a deal to purchase approximately US $22 billion dollars worth of aircrafts from Boeing gave me a lot to think about.

First on my list for all of you Forex traders, apparently Boeing (BA) isn't afraid to do big business with India despite their currency issues. That's a pretty big vote of confidence that should be considered when we analyze the Indian rupee for investment possibilities.

Yes, Boeing is willing to accept $22 billion worth of currency from India, and to add a cherry on top of the pie, the deal represents the potential of 205 aircraft. Here is where the big hammer drops -  the first plane won't be delivered until 2018!

So for all the doubts surrounding the Indian economy and currency, Boeing offers much needed reassurance with their willingness to engage in a business transaction of such magnitude.

The second aspect of this deal that I found interesting is that $22 billion is a very healthy dose of revenue for any firm. There is a strong possibility that this revenue could increase the stock price of BA and potentially allow shareholders to see gains.

The Boeing Company (BA)

Looking at the potential gains for BA led me to look at some other firms involved in aerospace technology and manufacturing. Airbus (AIR.PA) recently delivered its first aircraft to Iran, part of a 100 aircraft order. Iran has also ordered 80 aircraft from BA as well.

Airbus Group SE (AIR.PA)

We can surmise that there is a potential for these two companies to do well in the future. The companies that supply parts for these aircrafts will benefit from the trickle down effect of these large orders of aircraft as well.

That one headline I saw today was able to generate so many different scenarios for one to look for potential investments. We still have yet to look into investment opportunities with SpiceJet ordering the aircraft and Iran Air which also ordered a significant amount of aircraft from BA and AIR.

"This is the largest deal for SpiceJet, it's one of the largest in Indian aviation and is the largest for Boeing in India," said SpiceJet's chairman Ajay Singh.

Investment opportunities in Iran Air piques my interest the most. Iran has just been invited to the party after many years of sanctions imposed by the 'World Powers,' that were lifted recently. So the opportunity to get in on the ground floor of their new enterprises may potentially lead to some substantial long term gains.

As we watch the new planes reach the end of the assembly line and fly off to their new owners, we can also monitor the movements of the stocks associated with aircraft manufacturing, specifically Boeing and Airbus.