The Dubai Airshow marked a significant triumph for Boeing (BA), the Dow Jones jet manufacturer, as it announced a substantial string of orders, triggering a notable surge in its stock. This uptick comes amid emerging reports that China may resume purchasing Boeing's 737 MAX aircraft, adding to the positive momentum.
Dubai's Aviation Bonanza
A major highlight of the Airshow was Emirates Airline, the largest operator of Boeing 777 aircraft globally, announcing a staggering $52 billion order for Boeing's widebody jets. This order encompasses 55 Boeing 777-9s, 35 777-8 jets, and five 787 planes. This deal significantly increases Emirates' backlog for 777x and 787 jets, with deliveries expected to span from 2025 to 2035.
Additionally, Flydubai revealed plans to acquire 30 Boeing 787-9 Dreamliners, marking its first venture into widebody aircraft orders. This decision aligns with Flydubai's strategy to expand its route network and increase capacity.
Another noteworthy deal came from SunExpress, a collaboration between Turkish Airlines and Lufthansa, committing to a potential purchase of up to 90 Boeing 737 aircraft. This agreement includes a firm order for 28 737-8s, 17 737-10 models, and an option for up to 45 additional 737 MAX planes.
Parallel to these developments, reports from Bloomberg hinted at China considering lifting its sales freeze on Boeing's 737 Max jets. This speculation arrives just as President Joe Biden and China's President Xi Jinping are scheduled to meet at the APEC conference in San Francisco. The potential thawing of relations between China and Boeing could significantly bolster Boeing's market position, as China represents a critical market for the aviation giant.
Stock Market Response
Reacting to these developments, BA shares rallied by 3.5% early Monday, reclaiming its 50-day moving average and consolidating with a 243.10 buy point. This growth mirrors the company's year-to-date rise of 3.2%.
In contrast, Airbus (EADSY), Boeing's primary competitor, also saw a slight increase in its stock. EADSY's stock has soared over 16% this year, nearing its 2023 highs. Meanwhile, Air Lease (AL), a provider of jet leasing and fleet management services, witnessed a modest decline in its shares early Monday.
Industry Implications
These orders from Dubai carriers signal a bold statement in the competitive landscape, especially as Saudi Arabia expands its fleet and airlines in Turkey and India aim to divert more traffic from the Gulf. This demand surge for long-haul jets comes as the aviation industry rebounds from the COVID-19 pandemic's impact, prompting airlines to renew their fleet replacement plans.
This resurgence in orders and the potential re-entry of China into the Boeing market represent a pivotal moment for the aviation industry. The outcome of these developments could reshape the dynamics of global air travel and the competitive balance between the world's leading aircraft manufacturers.
