The most sought-after airplane from Boeing (NYSE: BA) is showing indications of returning to the Chinese market, bolstering the company’s stock.
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Boeing’s order book is progressively reverting to levels seen prior to COVID-19. However, with the cancellation of Boeing 737 MAX airplane operations, an earlier issue still exists. The firm had big aspirations for this plane, and it should have broken the record for single-model airliners sold by now.
The 737 MAX flights were halted following the disasters in 2018-2019, and Boeing began to incur considerable losses as a result of this project. Due to a lack of cash flow from 737 MAX sales and servicing, Boeing’s debt has increased 400 percent in the last five years.
737 MAX flights have already been approved in a number of nations, including the United States. However, by the end of 2021, China had required modifications from Boeing (BA) as well as more pilot training. As a result, the 737 MAX’s return to Chinese carriers has been pushed back.
China Southern Airlines, the largest Chinese operator of 737 MAX planes, began test flights this week, according to reports. This might indicate that the 737 MAX will be back in commercial service shortly.
The 737 MAX is in high demand for domestic flights in China, accounting for 20% of Boeing’s commercial aircraft deliveries.
The resumption of 737 MAX flights by all Chinese carriers is expected to boost BA stock prices. However, the 737 MAX project’s rehabilitation is not yet complete.
To fulfill demand, it is required to demonstrate the modernized airliner’s reliability, sign additional contracts, and boost production. After then, Boeing (BA) will get funding to pay down the 737 MAX project’s obligations.
The firm lost -44.81% of its share price over the past 12 months. The stock price dropped -4.23% during the last 5 trades and is up 7.80% during the last 30 trades.
