Font size
Boeing said it had re-ordered two dozen 737 MAX jets.
Silvio Avila / AFP via Getty Images
Boeing
got a new customer for its 737 MAX jets, and the new order increases the shares of the commercial aerospace giant. Friday’s earnings close out what has been an incredible week for Boeing stock.
Shares of Boeing (ticker: BA) rose 6.8% on Friday. The shares have a five-day winning streak, up more than 20% over the past week. The S&P 500, by comparison, is up about 2.6%. The Dow Jones Industrial Average is up 4% over the same period, largely thanks to Boeing.
The Dow is a price-weighted index and Boeing has the fourth highest share price at around $ 270, making Boeing a relatively large part of the Dow. The stock’s rise this week has added about 300 points to the Dow’s overall gain of nearly 1,300 points this week.
Private equity firm 777 Partners is the purchaser of two dozen MAX jets and has options for 60 more. It’s fair 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 rental company.
Boeing has referred Barron’s to his press release when asked about 777.
“We are thrilled to partner with Boeing on this transformative order for our growing aviation business,” said Joshua Wander, managing partner of 777 in Boeing’s press release. “The reduction of traditional carriers worldwide has created an unprecedented market opportunity for more agile and cost-efficient operators.”
777 Partners has several investments in low-cost airlines around the world, and the MAX jets will be flown by those airlines. 777 Partners was not immediately available for a request for comment on its purchase or aircraft deployment strategy.
The MAX has had two tough years. It was grounded worldwide in March 2019 after two fatal crashes within five months. The plane only started flying passengers again last December.
The 737 program saw more than 500 aircraft cancellations in 2020. The pandemic has, of course, decimated the demand for commercial air travel. However, Boeing has managed to generate a number of additional orders or letters of intent to purchase the MAX jet in recent years.
Airlines and airline rental companies are still interested in the MAX because it is cheaper to fly than older models, and airlines always need to cut costs. Boeing has about 4,000 MAX jets behind.
Write to Al Root at [email protected]