Here’s Why Honeywell and Rockwell Collins Are Set to Take Off

Honeywell International (NYSE:HON) and Rockwell Collins (NYSE:COL) have hitched a ride on Boeing’s (NYSE:BA) updated 737 Max jetliner.

The Wall Street Journal reported on Wednesday that both manufacturing companies are poised to receive significant contracts to supply systems for the new jet, citing two sources familiar within the company.

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Boeing confirmed the Journal’s report in a press release issued on Thursday. In detailing the jetliner’s updated systems, the aerospace company stated that Honeywell will supply “an electronic bleed air system” and Rockwell will manufacture “large-format displays” for the flight deck. Boeing has already decided to use an engine manufactured by CFM International, a joint venture between Safran and General Electric (NYSE:GE).

Currently, Honeywell and Rockwell supply components for the existing model of the 737.

While the value of the deal has not yet been set, the contract is important for both companies. The 737 is Boeing’s best-selling plane to date: including both the existing version of the 737 and the 737 Max, the company has sold more than 1,000 jets this year. On Wednesday, Boeing announced that SilkAir, a unit of Singapore Airlines, had purchased 54 jets, which finalized the company’s year-end total. Boeing’s previous record for jet orders in a single year was 846 in 2007.

The first updated 737 Max is scheduled to be delivered to Southwest Airlines (NYSE:LUV) in late 2017.

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