SerpApi.Org
Boeing is going to have a busy few days.
The biennial Farnborough Airshow kicks off on Monday. It’s a chance for aerospace executives to meet, update investors, and more importantly, conduct business with each other.
Ahead of the show, Bloomberg recently reported that the Federal Aviation Administration would allow Boeing to certify 737 and 787 planes coming off the assembly lines. The certification process was modified following the second 737 MAX crash in 2019. The change is good news and demonstrates progress Boeing has made restoring trust with its chief regulator.
“Boeing will continue to work under the oversight of the FAA in building safe, high-quality commercial airplanes that comply with all airworthiness certification requirements,” said the company in an emailed statement.
In addition, Reuters reported that the new Air Force One was on track to be delivered in 2028. Boeing has taken billions in charges on the program to reflect rising costs.
Boeing referred Barron’s to the Air Force regarding Air Force One questions.
Neither item is a material surprise and shouldn’t significantly move Boeing’s stock. Both come just as the Farnborough Airshow, just outside of London, kicks off. Investors can expect new orders for jets, but new orders just aren’t the story these days.
Boeing and Airbus have undelivered backlogs of some 15,000 jets. That’s more than a decade of work at current build rates. What’s more, Boeing sees 44,000 new jets needed over the next 20 years as demand for air travel doubles.
The global fleet of commercial jets is roughly 28,000 planes. With retirements, the global fleet will be closer to 50,000 planes by 2046.
The job for both companies is to increase production. What each company says about its supply chain will probably move the stocks more than new orders.
Still, new orders don’t hurt. Riyadh Air, SMBC Aviation Capital, and Philippine Airlines have all ordered new jets from Boeing or converted options for orders into firm orders in recent hours.
Boeing stock was up almost 1% in premarket trading, but gains didn’t last. Shares closed at $209.48, down 2.1%, while the S&P 500 and Dow Jones Industrial Average lost 0.2% and 0.6%, respectively.
Boeing stock has traded above $250 and below $190 this year, with volatility picking up after oil prices spiked amid fighting in Iran. Coming into Monday trading, Boeing stock was down 6% since the war in Iran began, down 1% year to date, and down 7% over the past 12 months.
(Airbus stock was down 3% year to date and up 4% over the past 12 months.)
Investors, it seems, are waiting for things to calm down a little before jumping back into shares.
Barron’s wrote positively about Boeing stock in October, believing new management had the company on the right track. Shares were about $200 at the time.
Write to Al Root at [email protected]
