Boeing, the renowned aircraft manufacturer, recently announced a significant deal with Vietnam Air. During his visit to Vietnam, President Biden revealed the details of this “landmark” agreement, which is estimated to be worth a staggering $8 billion. While Boeing has yet to respond to inquiries regarding the deal, it is highly likely that the order involves their popular 737 MAX jets.
The order placed by Vietnam Air is expected to include approximately 70 to 80 MAX jets. It is important to note that airlines typically negotiate discounts on the list prices of these aircraft, which are not publicly disclosed. Therefore, the exact pricing details of this deal remain undisclosed.
Currently, Vietnam Air operates Boeing 787 jets but does not have any 737 models in its fleet. This sizable order from an esteemed airline is undoubtedly a significant win for Boeing.
Following this positive news, Boeing’s shares experienced a boost, rising by 1.7% during premarket trading. Meanwhile, futures for the S&P 500 and Dow Jones Industrial Average also showed modest gains of approximately 0.4% and 0.2% respectively.
Although aircraft orders do not always have an immediate impact on Boeing’s stock, it is crucial to consider the company’s extensive backlog of nearly 5,000 undelivered planes, representing years of demand. In 2018, before the onset of the Covid-19 pandemic, Boeing successfully delivered around 800 jets. Looking ahead, Wall Street analysts project a total of approximately 560 deliveries for the year 2023. However, among all the recent developments, the deal with Vietnam Air stands out as the most significant news for Boeing stock at the beginning of this week.
Investors and industry analysts closely monitor the increasing number of orders for the 737 MAX series. This particular aircraft had faced a global grounding between May 2019 and November 2022 due to two tragic crashes occurring within a short span of five months. These incidents were attributed to faulty software implementation.
Boeing’s latest deal with Vietnam Air not only demonstrates the rebuilding of trust and confidence in the 737 MAX but also showcases the company’s resilience and ability to secure valuable partnerships in the aviation industry.
The MAX vs. A220: Boeing and Airbus Compete for Orders
Impact on Economic Data
Air Show Boost and Order Trends
Market Performance and Future Outlook
In conclusion, while Boeing’s MAX has made significant strides in regaining trust and securing orders, it continues to face strong competition from Airbus. The future outlook remains promising, driven by the expected recovery in global air travel.
