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Boeing to resume Max deliveries to China; What’s next for BA stock

Boeing to resume Max deliveries to China; What’s next for BA stock
Elmaz Sabovic

The aviation giant Boeing (NYSE: BA) is poised to resume the delivery of its 787 Dreamliner to China in the coming days. This development can potentially signal China’s conclusion of a ban lasting over four years on Boeing’s 737 MAX deliveries.

A new 787 Dreamliner from Seattle is set to be received in Shanghai by Juneyao Airlines, a privately owned Chinese carrier. The aircraft is expected to take off as early as Thursday, as reported by Reuters on December 21.

Boeing has faced challenges in recent years due to the slower recovery in China. The global grounding of the MAX from March 2019 to November 2020, following two fatal crashes, impacted the aircraft’s reintroduction timeline.

Although most airlines resumed MAX operations in late 2020 or early 2021 after global aviation regulators recertified the plane, China chose to wait.

Impact on the Boeing stock

Resuming deliveries for Boeing would signify reopening opportunities in one of the world’s vital aerospace markets. The aircraft giant envisions this market will account for 20% of the world’s aircraft demand through 2042.

While deliveries to China represent a positive development, BA stock has yet to respond to the prospect. On December 20, shares concluded with a 1.2% decline, closing at $260.25, contrasting the gains of 3.75% over the past 5 trading sessions.

BA 24-hour stock price chart. Source: Finbold
BA 24-hour stock price chart. Source: Finbold

Shares have shown robust performance over the past month, with gains of 19.23%, contributing to a year-to-date gain of approximately 33.20%. Investor sentiment has improved as confidence grows regarding air traffic recovery and its positive implications for Boeing’s future earnings and free cash flow.

Alongside the potential recommencement of orders from China, the news of a potential order for up to 100 737 MAX jets by the European airline Lufthansa (ETR: LHA) is a positive development for the anticipated gains of BA stock.

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