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Boeing said it had received a new order for two dozen 737 MAX jets.
Silvio Avila / AFP via Getty Images
Boeing
has acquired a new customer for its 737 MAX aircraft, and the new order increases the shares of the commercial aviation giant. Friday’s gains reduce the incredible week for Boeing shares.
Shares of Boeing (tick: BA) rose 6.8% on Friday. The stock has a five-day winning streak, with more than 20% over the past week. The S&P 500 rose by about 2.6%. The Dow Jones industrial average rose 4% over the same team, thanks to Boeing.
The Dow is a price-weighted index, and Boeing has the fourth largest share price at around $ 270, making Boeing a relatively large share of the Dow. The stock’s gain this week added about 300 points from the Dow’s overall gain of nearly 1,300 points this week.
Private-equity firm 777 Partners is the buyer of two dozen MAX aircraft and has options for another 60. It is fair to say 777 came out of nowhere: this is the company’s first Boeing order, and 777 Partners is not a traditional airline or aircraft rental company.
Boeing refers Barron’s on his news release on a question about 777.
“We could not be more excited to partner with Boeing in this transformative order for our growing aviation industry,” 777’s managing partner Joshua Wander said in Boeing’s news release. “The retrenchment of traditional transportation companies worldwide has created an unprecedented market opportunity for more mobile and cost-effective entrepreneurs.”
777 Partners has several investments in low-cost airlines around the world, and the MAX aircraft will be flown by the airlines. 777 Partners were not immediately available for comment on the purchase or strategy for the use of aircraft.
The MAX had about two years. It was grounded worldwide in March 2019 after two fatal accidents within five months. The plane had just started flying passengers again this past December.
The 737 program had more than 500 aircraft cancellations by 2020. The pandemic has, of course, reduced the demand for commercial air travel. However, over the past few years, Boeing has managed to generate some extra orders or letters of intent for the MAX aircraft.
Airline and aircraft rental companies are still interested in the MAX because it is cheaper to operate than older models, and airlines must always save costs. Boeing has about 4,000 MAX aircraft in the backlog.
Write to Al Root at [email protected]