Stock in commercial aerospace giant Boeing is poised to rise following reports that China may soon end a freeze on sales of its 737 Max jets. According to Bloomberg, the Chinese government is contemplating a commitment to purchase Boeing’s 737 Max fleet during President Joe Biden’s meeting with Xi Jinping in San Francisco this week. Currently, Boeing has not made any significant sales of the 737 in China since 2018 when the aircraft model was grounded after two crashes in March 2019.
Boeing has yet to comment on the report.
Reviving the Max’s presence in China has been a protracted process, hampered not only by the grounding but also by the impact of Covid-19. However, there are signs of recovery. According to the International Air Traffic Association’s latest data, Chinese domestic air travel more than doubled in September 2023 compared to the same month in 2022, which was hindered by pandemic restrictions. In fact, September 2023 traffic levels exceeded those of September 2019 by approximately 8%.
Furthermore, there is an existing backlog of MAX orders from Chinese airlines. Although direct deliveries to airlines have not yet recommenced, a handful of MAX jets have been handed over to Chinese aircraft lessors in both 2021 and 2022.
A Promising Return for Boeing in China
Boeing, the renowned aircraft manufacturer, received some exciting news recently. Turkish-German airline SunExpress has expressed their interest in purchasing up to 90 of Boeing’s highly acclaimed 737 MAX Jets. This development has sparked optimism for Boeing’s future in China.
In addition to this, Emirates, the largest operator of Boeing 777 aircraft, announced a substantial order of 90 777X jets. This order further solidifies Emirates’ position as a prominent player in the aviation industry.
Emirates’ CEO, Sheikh Ahmed bin Saeed Al Maktoum, emphasized the significance of this order in maintaining their status as a premier airline. He stated, “Today’s order cements that position,” highlighting the immense value of their ongoing partnership with Boeing.
This positive momentum for Boeing coincides with their participation in the Dubai Air Show. The event showcases various cutting-edge models, such as the fuel-efficient 777 and 787 family, along with military aircraft like jet fighters and Apache and Chinook helicopters.
Industry analyst, Aarin Chiekrie from Hargreaves Lansdown, believes that Boeing has virtually limitless potential due to the anticipated increase in defense budgets from major buyers like the U.S., U.K., and Europe. This development augurs well for Boeing’s future prospects.
Despite the company’s disappointing earnings report for the third quarter, Boeing’s stock has defied expectations and seen impressive gains of over 13% this year. In premarket trading, Boeing shares rose by 3.2% to $202.90.
In conclusion, Boeing’s robust sales in China and other major airlines suggest a hopeful future for the company. As they continue to showcase their latest models at the Dubai Air Show, the sky truly is the limit for this aerospace giant.