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Boeing said it got a new order for two dozen 737 MAX aircraft.
Silvio Avila / AFP via Getty Images
Boeing
got a new customer for its 737 MAX aircraft and the new order increases the shares of the commercial aerospace giant. Friday’s gain surpasses what has been an incredible week for Boeing shares.
Shares of Boeing (ticker: BA) rose 6.8% on Friday. Shares are gaining five days, up more than 20% last week. In comparison, the S&P 500 is up about 2.6%. The Dow Jones industrial average has risen 4% in the same period, thanks in large part to Boeing.
The Dow is a price-weighted index, and Boeing has the fourth stock price at about $ 270, making Boeing a relatively large component of the Dow. This week’s stock gains have totaled around 300 points from Dow’s overall gain of nearly 1,300 points this week.
Private equity firm 777 Partners is the buyer of two dozen MAX aircraft and has options for 60 more. Needless to say, the 777 came out of nowhere: it’s the company’s first Boeing order and 777 Partners isn’t a traditional airline or aircraft charterer.
Boeing referred De Barron in his statement when asked about 777.
“We couldn’t be more excited to partner with Boeing in this transformative order for our growing aviation business,” 777 managing partner Joshua Wander said in a Boeing press release. “The reduction of traditional carriers globally has created an unprecedented market opportunity for more agile and profitable operators.”
777 Partners makes several investments in low-cost airlines around the world and these airlines will pilot MAX aircraft. 777 Partners was not immediately available for a request for feedback on its purchase or strategy for the deployment of the aircraft.
The MAX has been about two years old. It was established worldwide in March 2019 after two fatal accidents over a five-month period. The plane only started flying passengers last December.
The 737 program recorded more than 500 plane cancellations in 2020. The pandemic, of course, reduced the demand for commercial air travel. Boeing, however, has managed to generate a couple of additional orders or purchase letters of intent for the MAX jet over the past two years.
Airlines and aircraft lenders are still interested in the MAX, as it is cheaper to operate than older models and airlines should always reduce costs. Boeing has about 4,000 MAX aircraft in its portfolio.
Write to Al Root at [email protected]