“Demand for airplanes is as robust as I’ve ever seen it,’ Boeing CEO Dave Calhoun said earlier this week.
Boeing (BA) – Get The Boeing Company Report shares powered higher Wednesday amid news that a key China carrier conducted test fights of the planemaker’s troubled 737 MAX, suggesting it could return to service in the world’s biggest aircraft market.
China Southern Airlines Co Ltd. flew a Boeing 737 MAX from its Guangzhou headquarters to the central China city of Nanyang yesterday, Reuters reported citing data from flight tracking group Varflight, before returning to the carrier’s headquarters later that evening.
The flight could signal the return to service for the work-horse yet, which was delayed by the impact of an unrelated incident in March, when a Boeing-made 737-800 passenger jet operated by China’s Eastern Airlines crashed and killed 132 passengers and crew members during a routine flight between Kunming to Guangzhou.
China’s Civil Aviation Authority issued an “airworthiness directive” for the MAX on December 2 that provided instructions to airline operators as to what changes are required before the planes can be included in domestic fleet operations.
Last year, Boeing said China, the world’s second-largest economy but the largest aircraft market, would likely need 8,700 new airplanes over the next two decades, a figure that translates to overall sales of around $1.47 trillion.
A further $1.8 trillion will likely be needed to service both its existing and future fleet additions over the next 20 years, Boeing said.
Boeing shares were marked 5.5% higher in early Wednesday trading to change hands at $128.98 each, a move that would nudge the stock into a one-month gain of 4%, compared to a 4.6% decline for the Dow Jones Industrial Average.
Boeing said yesterday that it delivered 29 737 MAX jets last month, with overall deliveries of 35 aircraft, as it prepares for crucial summer air shows in Paris and Berlin.
The planemaker’s overall order backlog was pegged at 4,192 aircraft, Boeing said, up marginally from the same period last year.
CEO Dave Calhoun told reporters earlier this week during an event marking the planemaker’s relocation to the suburbs of Washington, D.C. that “demand for airplanes is as robust as I’ve ever seen it'”, adding “I think it will get more robust.”
Boeing posed an adjusted core loss for the three months ending in March of $2.75 per share, down from a loss of $1.53 per share over the same period last year but well outside the Street consensus forecast of a 25 cents per share loss.
Boeing took one-time charges of around $1.2 billion linked to the impact of its businesses in Russia as well as the Air Force One Presidential jet.
Group revenues, Boeing said, fell 8% from last year to $14 billion, a tally that also missed analysts’ forecasts of a $16.02 billion tally. Free cash flow was estimated at -3.6 billion for the quarter, Boeing said, but the group reiterated its forecast to turn the figure positive in 2023.