Boeing (BA) announced a major order for 787 Dreamliner widebody jets and more from United Airlines (UAL) Tuesday. BA stock rose early Tuesday after ascending in a buy range Monday. UAL stock fell slightly.
United Airlines will buy 100 Dreamliners with the option to buy 100 more. The Boeing 787 Dreamliners, set to be delivered between 2024-2032, will replace Boeing 767s and some of its Boeing 777s.
United Air will also buy another 56 Boeing 737 Max narrowbody jets and exercise options for 44 more.
A big order had been expected.
Late last week, a leaked invitation showed the Dow Jones aviation giant and United planned a joint “historic announcement” at Boeing’s South Carolina facility. That is where Boeing makes all 787 variants.
The Wall Street Journal had previously reported that United was looking to order around 100 planes.
Plane makers and their airline customers are seeing commercial aircraft demand recover after a yearslong hit, due to Covid-19 travel restrictions. Meanwhile, Boeing is restructuring after a series of industrywide and company-specific challenges.
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Shares of Boeing rose 2.2% to above 190 before the open on the stock market today. On Monday, Boeing stock popped 3.7% to 186.18. That pushed BA stock beyond the 5% chase zone from a 173.95 buy point for a cup base.
BA stock had closed in buy range above an alternate entry near 180, from its recent mini-consolidation. But it may open slightly extended from that area as well.
The Dow Jones stock made choppy progress from its Nov. 10 breakout past the cup-shape entry. The relative strength line for Boeing stock is at its best levels since February, a sign of outperformance vs. the S&P 500 index.
UAL stock fell 1% early Tuesday. Shares pink 2.8% Monday to 44.24.
Boeing Eyes Air India Deal
Meanwhile, on Sunday sources told Reuters that Air India is close to ordering 500 jetliners worth tens of billions of dollars from both Boeing and Airbus (EADSY).
The order would rank “among the biggest by a single airline in volume terms,” the news report said. It would even overshadow “a combined order for 460 Airbus and Boeing jets from American Airlines over a decade ago.”
Air India is undergoing a financial restructuring after diversified, privately held Indian heavyweight Tata Group regained control of the airline in January. Tata Group is also the parent Tata Motors (TTM).
The timeline for an official announcement of the order is unclear. But Reuters said sources sought anonymity because “finishing touches are (expected to be) placed on the mammoth deal in 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 world’s fastest-growing air travel market, according to Reuters.
At an investor day on Nov. 9, Boeing gave a free cash outlook well above Wall Street’s estimates on expectations for rising jet deliveries. That lifted BA stock more than 5% the next day.
During the pandemic, Boeing suffered from the collapse in commercial and business air travel, which pounded BA stock. That compounded the grounding of the global 737 MAX fleet following two fatal crashes in 2018 and 2019. The company also faced setbacks to key defense programs.
Additionally, recession fears and supply disruptions are now rippling through industrial manufacturing chains, including airlines.
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