Boeing is also showing off new models at the Dubai Air Show this week.
Giuseppe Cacace/AFP via Getty Images
Stock in commercial aerospace giant
Boeing
stock was on the rise early Monday after a media report said that a yearslong freeze on sales in China could soon be lifted.
The Chinese government is considering a commitment to buy 737 Max jetliners as President Joe Biden meets Xi Jinping in San Francisco this week, Bloomberg reported, citing unidentified people familiar with the plans. The commercial aerospace giant hasn’t made any significant sales of the 737 in China since 2018, before the model was grounded after two crashes in March 2019.
Boeing (ticker: BA) didn’t immediately respond to a request for comment about the report.
It’s been a long road back for the Max in China, not only because of the grounding but also because of Covid-19. Chinese domestic air travel more than doubled in September, according to the latest data from the International Air Traffic Association. But September 2022 is a low base as pandemic restrictions were still in effect. For a prepandemic comparison, September 2023 traffic beat September 2019 traffic by about 8%.
Demand for air travel is one reason for more of the new planes. But before new planes are shipped, a few things needed to have happen. For starters, Chinese regulators needed to allow the plane to fly again. That came in late 2021. Then international airlines began flying the MAX into China again in 2022. Chinese airlines started flying their own MAX jets more in 2023.
Then there is the existing backlog of MAX orders. Chinese airlines have ordered hundreds of MAX jets. Direct deliveries to airlines haven’t restarted, but a few MAX jets have been delivered to Chinese aircraft lessors in 2021 and 2022.
A return to normal in China is good for Boeing shares. So are more plane orders from other airlines. Boeing announced Monday that Turkish-German airline SunExpress will buy up to 90 of the 737 MAX Jets. Long-haul carrier Emirates also announced an order of 90 777X jets early Monday.
“Emirates is the biggest operator of Boeing 777 aircraft, and today’s order cements that position,” Emirates CEO and Crown Prince of Dubai Sheikh Ahmed bin Saeed Al Maktoum said.
The prospect of new 737 sales comes as Boeing shows off other models at the Dubai Air Show. It is showcasing the 777 and 787 family of fuel-efficient models, as well as jet fighters and Apache and Chinook helicopters for military use.
“With some of its biggest buyers, the U.K., U.S., and Europe, all expected to continue raising defense budgets over the coming years, the sky really is the limit for this jet maker,” said Aarin Chiekrie, an analyst at Hargreaves Lansdown.
Boeing shares were up 3.6% to $203.70 while the
S&P 500
was down 0.3% and the
Dow Jones Industrial Average
slipped 0.4%.
Coming into Monday trading, the stock has gained more than 13% this year, even though investors have generally been disappointed with the company’s earnings. Last month, Boeing reported a wider-than-expected loss for the third quarter.
Write to Brian Swint at [email protected] and Al Root at [email protected]
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