Japan is rekindling its long-held aircraft development ambitions while aerospace giant Boeing (NYSE:BA) continues to falter. The country is bringing together companies to develop new energy aircraft.
New Aircraft Attempt
Japan aims to introduce a new aircraft by 2035. Its Ministry of Economy, Trade, and Industry is bringing together domestic and foreign producers and airlines towards this goal. Last year, Mitsubishi Heavy Industries (OTC:MHVYF) ended its SpaceJet aircraft project after nearly 15 years of development effort.
Moreover, the airplane was aimed at catering to domestic carriers such as ANA Holdings (OTC:ALNPY). However, a lack of technological know-how and pressure to electrify and decarbonize led to a change of strategy at Mitsubishi. At the time, total funding for the project was pegged at over $7.6 billion.
Green Aircraft Venture
Now, the latest attempt is pegged at a whopping $33 billion to produce an aircraft that will be powered by hydrogen or another alternative energy source. According to Bloomberg, multiple names including Subaru Corp (OTC:FUJHY), Mitsubishi, IHI Corp (OTC:IHICF), Japan Space Agency, and Kawasaki Heavy Industries (OTC:KWHIF) will be part of the project.
Boeing’s Uphill Task
Japan’s aircraft push comes amid persistent production and quality woes at Boeing. The aircraft producer is shaking up its top rung. CEO Dave Calhoun and Board Chair Larry Kellner are leaving the company this year. While Boeing tries to shake things up and regain confidence, it could be a while before the stock recoups the nearly 28% year-to-date price decline.
Is BA a Good Buy Right Now?
Overall, the Street has a Moderate Buy consensus rating on Boeing alongside an average BA price target of $247.91. This points to a potential upside of nearly 30.9% in the company’s share price.
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