Boeing sold more 737 MAX jets. Investors found out from the president. Boeing stock is rising.
President Biden was also in attendance. Vietnam He briefly said he welcomed the “groundbreaking” deal between Boeing (NYSE: BA) and Vietnam Airlines last weekend for the equivalent of a 737 MAX jet. about $8 billion.
Here is the order 50 MAX jets More options may be included. Boeing did not immediately respond to a request for comment on the options. Airlines typically do not pay list price for new equipment, but orders are quoted at list price. Discounts are negotiated and are closely guarded industry secrets.
Vietnam Airlines currently flying We have a Boeing 787, but no 737. It’s a nice win for Boeing.
Dang Ngoc Hoa, chairman of Vietnam Airlines, said: “The new narrowbody aircraft will enable us to boost our overall development in Vietnam Airlines’ domestic and Asian routes, expand our high-quality services, and improve fuel efficiency. “We can modernize expensive equipment.” Vietnam Airlines’ board of directors said in a news release.
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Boeing shares rose 0.9% in premarket trading.
S&P500
and
Dow Jones Industrial Average
Futures rose about 0.4% and 0.2%, respectively.
Orders don’t always move Boeing stock. Boeing’s official order backlog has about 5,000 undelivered aircraft. It’s been in demand for years. Boeing delivered about 800 jets in 2018, before the coronavirus pandemic. Wall Street predicts deliveries of about 560 aircraft in all of 2023. Still, the Vietnam-related announcement is the most important news for Boeing stock to begin the week.
Investors want to see construction orders for MAX jets, but the plane will operate worldwide from May 2019 to November 2022 after two fatal crashes within five months stopped. Faulty software was blamed.
Although the plane has been back in service for years and has flown without incident, the MAX still lags behind rival products from rival Airbus SA (AIR.France). Boeing has orders for more than 7,000 MAX planes.airbus
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has recorded more than 10,000 orders for its A220 and NEO series jets.
Airbus had a head start. The A320 NEO entered service in 2016. The MAX entered service in 2017, but then encountered problems that required a redesign.
Stock prices don’t always fluctuate, but Boeing’s orders can shift U.S. economic indicators. In late August, the Census Bureau announced New orders for U.S.-made durable goods in July fell 2.1% from June, following four consecutive months of increases. Total orders received decreased by $12.7 billion to $579.4 billion. It was all a Boeing effect. New orders for transportation equipment decreased by $15.7 billion to $285.5 billion.
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The results were not surprising. The Paris Air Show was held in June, and Boeing received large orders for about 300 new planes. Orders for non-defense aircraft and parts totaled $21.2 billion in July, down from $37.5 billion in June. The surge in air show orders is real, with new orders reaching $21.2 billion in May.
In Monday trading, Boeing shares have risen 34% in the past 12 months, while the S&P 500 index has gained about 8%. Investors are becoming more optimistic about the recovery in global air travel post-pandemic and what that means for demand for new jets.
Email Al Root (allen.root@dowjones.com).