Airline giant American Airlines, Inc. (NASDAQ: AAL) has revealed that the company has agreed to buy 20 ultra-fast planes from the aerospace startup Boom Supersonic. The financial terms of the deal were not disclosed.
The shares of American Airlines were up 1.1% to close at $15.50 during normal trading hours.
American Airlines is Optimistic About Ultra-Fast Planes
The airline company remains bullish about the prospects of ultra-fast planes in the future as they are expected to travel at a speed twice as fast as commercial planes can fly today. In fact, Boom expects its Overture aircraft to fly over 600 routes in half the time commercial planes take and at prices comparable to current business-class prices.
Notably, American Airlines has deposited a non-refundable sum for the initial purchase of these 20 aircraft, with options to purchase 40 more.
Meanwhile, American Airlines joins its competitor, United Airlines (UAL), in ordering Boom’s Overture planes. Last year, United ordered 15 Boom Overture jets.
Is American Airlines a Good Stock to Buy?
Top investors seem convinced about the company’s prospects and are loading up on its stock.
TipRanks’ Stock Investors tool shows that top investors currently have a Very Positive stance on AAL. Further, 14.3% of the top portfolios tracked by TipRanks, increased their exposure to AAL stock over the past 30 days.
Overall, the consensus among analysts for American Airlines stock is a Hold based on seven Holds and two Sells. The AAL average price target of $15.25 implies a downside potential of 1.6% from current levels. Shares have declined 19.9% over the past year.
The airline industry has revived its interest in supersonic travel speed. American Airlines’ move to fortify its ultra-fast plane fleet is in line with the industry’s recent trend. The company is confident that these ultra-fast planes will result in shorter travel times for customers at cost-effective rates.
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