landed a new customer for its 737 MAX jets, and the new order is propelling the commercial aerospace giant’s shares higher. Friday’s gain tops off what has been an incredible week for Boeing stocks.
Shares of Boeing (ticker: BA) rose 6.8% on Friday. The shares are on a five-day winning streak, rising more than 20% over the past week. The S&P 500, by comparison, is up 2.6%. The Dow Jones industrial average has risen 4% in the same period, thanks in large part 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 component of the Dow. Stock gains this week have added about 300 points to the Dow’s overall gain of nearly 1,300 points this week.
Private equity firm 777 Partners is the buyer of two dozen MAX jets and has options for 60 more. It’s fair to say that the 777 came out of nowhere – it’s the company’s first Boeing order, and 777 Partners isn’t a traditional airline or aircraft lessor.
Boeing referred Barron to his press release when asked about 777.
“We couldn’t be more excited to partner with Boeing in this transformative order for our growing aviation business,” 777 Managing Partner Joshua Wander said in the Boeing press release. “The reduction of incumbents globally has created an unprecedented market opportunity for more agile and profitable operators.”
777 Partners has several investments in low-cost airlines around the world, and those airlines will fly the MAX aircraft. 777 Partners was not immediately available to request comment on its purchase or strategy for the aircraft’s deployment.
The MAX has had a rough two years. It was grounded around the world in March 2019 after two fatal accidents in a five-month period. The plane only started carrying passengers again last December.
The 737 program saw more than 500 aircraft cancellations in 2020. The pandemic, of course, decimated the demand for commercial air travel. Boeing, however, has managed to generate a couple of additional orders, or letters of purchase intent, for the MAX jet in recent years.
Airlines and aircraft lessors are still interested in the MAX because it is cheaper to operate than older models, and airlines always need to cut costs. Boeing has about 4,000 MAX aircraft in its portfolio.
Write Al Root at [email protected]