The airline sector at large has been among the worst-hit since the coronavirus pandemic came into effect. Many airplane manufacturers and airliners have ended up receiving billions in government support in order to prop them up during these tricky times instead of going out of business. However, at least one company has seen some good news. Boeing (NYSE: BA) said on Wednesday that it had received the first new orders of its 737 Max airliners.
It’s a significant announcement, with Boeing’s 737 Max’s having been grounded for around a year since two fatal crashes in 2019 cost the lives of hundreds of passengers. It had turned out to be a problem with the software that caused the crashes, but despite fixing the problem, the company’s planes remain grounded until aviation regulators give an okay for the planes to fly again.
As it turned out, a polish carter airline called Enter Air reached a deal to buy a couple of 737’s, with the option of buying an additional two planes sometime in the future. While this agreement isn’t a big deal financially for the troubled airplane maker, it’s an important symbolic victory. For the past few months, customers have been canceling their previous orders at a faster rate than new orders can keep up. During July, the airplane maker had a net negative order number of 836 planes.
“Despite the current crisis, it is important to think about the future. To that end, we have agreed to order additional 737-8 aircraft. Following the rigorous checks that the 737 MAX is undergoing, I am convinced it will be the best aircraft in the world for many years to come,” said Grzegorz Polaniecki, director of Enter Air. “We are humbled by Enter Air’s commitment to the Boeing 737 family,” added Ihssane Mounir, Boeing’s senior vice president of commercial sales in a statement.
This announcement is a pretty big deal for Boeing, which has had a lot of problems with its 737’s. Shares of the company’s stock were down around 0.6% in Wednesday’s trading session, although the stock is showing upwards momentum during after hours trading. Since the beginning of the year, Boeing is down around 50%, making it one of the worst-performing companies in the U.S. stock exchange. Other airlines and airplane manufacturers have suffered similar declines over this period as well, especially since travel traffic has seen such a drastic decline due to the pandemic.
Boeing Company Profile
Boeing is the world’s largest aerospace and defense firm. With headquarters in Chicago, the firm operates in four segments, commercial airplanes, defense, space & security, global services, and Boeing capital. Boeing’s commercial airplanes segment produces about 60% of sales and two-thirds of operating profit, and it competes with Airbus in the production of aircraft ranging from 130 seats upwards. Boeing’s defense, space & security segment competes with Lockheed, Northrop, and several other firms to create military aircraft and weaponry. The defense segment produces about 25% of sales and 13% of operating profit, respectively. Boeing’s global services segment provides aftermarket servicing to commercial and military aircraft and produces about 15% of sales and 21% of operating profit. – Warrior Trading News
