EADS and MTU Aero shares surge 6% - suppliers share wrap

EADS and MTU Aero Engines led suppliers shares higher yesterday on a generally more positive days for European stocks.

The outlook for aircraft manufacturing continues to improve with growth in air traffic demand, particularly in emerging markets, while the lower euro favours exports from Europe.

Boeing announced earlier this week that it would increase B737NG production from 31.5 to 34 aircraft per month from early 2012, in response to continued strong demand for the type. Airbus had already announced that it would be lifting A320 production to approximately 36 aircraft per month by the end of 2010.

Meanwhile, MTU Aero Engines has also reported more milestones in progress for its PW1000G Geared Turbofan engine family. The manufacturer completed the first high-speed low-pressure turbine for the PW1524G engine for the Bombardier CSeries. PW1000G family engines will also power the Mitsubishi Regional Jet and the Irkut MC-21 narrowbody.

Airbus is also considering the engine, along with the CFM Leap-X, as a replacement for the existing CFM-56 and IAE V2500 engines used on the A320. Chinese manufacturer Comac has decided to power its new C919 with the Leap-X engine.

EADS shares surged 6.2% on Tuesday, while MTU Aero Engines' shares were up 6%. Boeing dropped 2.8%.

Selected Aviation suppliers’ daily share price movements (% change): 18-May-2010