Boeing (BA) announced a major order for 787 Dreamliner widebody aircraft and more United Airlines (LAU) Tuesday. BA stock rose early on Tuesday after climbing into a buy range on Monday. UAL stock fell slightly.
United Airlines will purchase 100 Dreamliners with the option of purchasing 100 more. The Boeing 787 Dreamliners, scheduled for delivery between 2024 and 2032, will replace the Boeing 767s and some of its Boeing 777s.
United Air will also purchase 56 other narrow-body Boeing 737 Max aircraft and exercise options for 44 more.
A large order was expected.
At the end of last week, a leaked invitation showed that aviation giant Dow Jones and United were planning a joint “historic announcement” at Boeing’s South Carolina facility. This is where Boeing manufactures all variants of the 787.
The Wall Street Journal previously reported that United was looking to order around 100 planes.
Aircraft manufacturers and their airline customers are seeing demand for commercial aircraft recover after a year of success, due to Covid-19 travel restrictions. Meanwhile, Boeing is restructuring after a series of industry-wide and company-specific challenges.
Boeing shares rose 2.2% to top 190 before the opening of the stock market today. On Monday, Boeing stock jumped 3.7% to 186.18. This pushed BA stock past the 5% hunting zone from a buy point of 173.95 for a cup base.
The BA share had closed in to buy range above an alternative entry near 180, from its recent mini-consolidation. But it can also open slightly from this area.
Dow Jones stock has made choppy progress since its Nov. 10 breakout after entering cup-shape. The relative force line as Boeing stock is at its best level since February, a sign of outperformance against the S&P 500 index.
UAL stock fell 1% early Tuesday. The shares rose 2.8% on Monday to 44.24.
Boeing plans deal with Air India
The order would rank “among the largest from a single airline in terms of volume,” according to the report. It would even eclipse “a combined order for 460 Airbus and Boeing planes from American Airlines more than a decade ago.”
Air India is undergoing financial restructuring after Tata Group, a diversified and private Indian heavyweight, regained control of the airline in January. Tata Group is also the parent company Tata Engines (MTT).
The timing of an official order announcement is unclear. But Reuters said sources sought anonymity because “the final touches are (expected to be) being made to the mammoth deal in the coming days”.
EADSY shares climbed 1.9% on Monday. TTM shares edged up 0.1% below the 50-day moving average on Monday.
India is the fastest growing air travel market in the world, according to Reuters.
At an Investor Day on November 9, Boeing gave free cash outlook well above Wall Street estimates of expectations for increased jet deliveries. This lifted BA stock more than 5% the next day.
During the pandemic, Boeing has suffered from a slump in commercial and business air travel, which has dragged BA shares down. This compounded the grounding of the global 737 MAX fleet following two fatal crashes in 2018 and 2019. The company has also faced setbacks in key defense programs.
Additionally, recession fears and supply disruptions are now spilling over to industrial manufacturing chains, including airlines.
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