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Boeing (BA) Gains as Ryanair Orders for 75 More 737 MAX Jets
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The Boeing Company (BA - Free Report) recently secured orders for 75 additional 737 MAX airplanes from Europe's largest airline — Ryanair — marking the first ever order for this plane since it received flight clearance from the U.S. Federal Aviation Administration (“FAA”). Naturally this instilled confidence among investors, as is evident from the rise in share price following the news.
Boeing’s shares gained 4% to touch $232.71 on Dec 4 buoyed by Ryanair’s order, which thereby boosted the airlines’ order book for 737 MAX to 210 jets.
Boeing’s History With Ryanair
Ryanair has been one of Boeing's major clients since 2014. The airline company placed its first order for 100 737 MAX airplanes and 100 more in late 2014, followed by firm orders of 10 airplanes in 2017 and 25 in 2018. The new orders will enable Ryanair to configure its aircraft with 197 seats, thus increasing revenue potential and reduce fuel consumption by 16% compared to the airline's previous airplanes.
Significance of the Deal
At a time when the entire aerospace industry is witnessing extreme downturn, and Boeing having faced around 460 order cancellations for the 737 MAX jets this year, the new deal bode well for the company. This deal will further boost the company’s confidence in approaching other buyers for the 737 MAX jets.
What’s Favoring Boeing Of Late?
The recent orders placed by Ryanair is likely a result of the approval given by the FAA last month to Boeing, which now certifies the 737 MAX safe for flying, after series of upgrades to the plane and pilot training protocols, and regulatory interventions.
The approval, after a long layover of grounding since March 2019, has bought a huge relief to both Boeing and its customers that operate the 737 MAX jets worldwide. Evidently, the company's beleaguered 737 MAX jets, which have been constantly losing orders over a past few months, are now showing signs of recovery.
While Ryanair has already signed a purchase deal for 737 Max, other airlines also seem to be interested in this freshly upgraded plane. Notably, following the FAA's approval, Delta Air Lines (DAL - Free Report) Chief Executive Officer, Ed Bastian hinted at possibilities of purchasing Boeing’s 737 Max, per a Reuter's report. Moreover, Southwest Airlines (LUV - Free Report) is in discussions with Boeing for sealing a purchase deal of up to 30 737 MAX jets, as stated in a Bloomberg report in November. Alaska Air (ALK - Free Report) also announced plans of leasing 13 new Boeing 737-9 MAX jets as part of its fleet modernization efforts.
In line with such promising developments, Boeing remains focused on safely returning the full 737 fleet to service and delivering the backlog of airplanes to Ryanair and its other customers worldwide. This, is turn, should help the jet maker bring its commercial business on a positive growth trajectory.
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Boeing (BA) Gains as Ryanair Orders for 75 More 737 MAX Jets
The Boeing Company (BA - Free Report) recently secured orders for 75 additional 737 MAX airplanes from Europe's largest airline — Ryanair — marking the first ever order for this plane since it received flight clearance from the U.S. Federal Aviation Administration (“FAA”). Naturally this instilled confidence among investors, as is evident from the rise in share price following the news.
Boeing’s shares gained 4% to touch $232.71 on Dec 4 buoyed by Ryanair’s order, which thereby boosted the airlines’ order book for 737 MAX to 210 jets.
Boeing’s History With Ryanair
Ryanair has been one of Boeing's major clients since 2014. The airline company placed its first order for 100 737 MAX airplanes and 100 more in late 2014, followed by firm orders of 10 airplanes in 2017 and 25 in 2018. The new orders will enable Ryanair to configure its aircraft with 197 seats, thus increasing revenue potential and reduce fuel consumption by 16% compared to the airline's previous airplanes.
Significance of the Deal
At a time when the entire aerospace industry is witnessing extreme downturn, and Boeing having faced around 460 order cancellations for the 737 MAX jets this year, the new deal bode well for the company. This deal will further boost the company’s confidence in approaching other buyers for the 737 MAX jets.
What’s Favoring Boeing Of Late?
The recent orders placed by Ryanair is likely a result of the approval given by the FAA last month to Boeing, which now certifies the 737 MAX safe for flying, after series of upgrades to the plane and pilot training protocols, and regulatory interventions.
The approval, after a long layover of grounding since March 2019, has bought a huge relief to both Boeing and its customers that operate the 737 MAX jets worldwide. Evidently, the company's beleaguered 737 MAX jets, which have been constantly losing orders over a past few months, are now showing signs of recovery.
While Ryanair has already signed a purchase deal for 737 Max, other airlines also seem to be interested in this freshly upgraded plane. Notably, following the FAA's approval, Delta Air Lines (DAL - Free Report) Chief Executive Officer, Ed Bastian hinted at possibilities of purchasing Boeing’s 737 Max, per a Reuter's report. Moreover, Southwest Airlines (LUV - Free Report) is in discussions with Boeing for sealing a purchase deal of up to 30 737 MAX jets, as stated in a Bloomberg report in November. Alaska Air (ALK - Free Report) also announced plans of leasing 13 new Boeing 737-9 MAX jets as part of its fleet modernization efforts.
In line with such promising developments, Boeing remains focused on safely returning the full 737 fleet to service and delivering the backlog of airplanes to Ryanair and its other customers worldwide. This, is turn, should help the jet maker bring its commercial business on a positive growth trajectory.
Price Performance & Zacks Rank
Shares of the Zacks Rank #3 (Hold) company have gained 44.4% in the past three months compared with the industry’s growth of 11.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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