Boeing Heads For $35 Billion Weekly Gain, The Max Jet Could Still Cause Problems

Boeing Co's share was at multiyear lows due to concerns about mounting losses in March and April.


Boeing Stock Heads $35 Billion Weekly Gain

The U.S. planemaker in finally heading for it's best week on more than two months as gain in jobs and airline bookings is gradually increasing.


This signals that demand for air travel and jets is gradually recovering to it's previous state before the outbreak of corona virus pandemic. 


Although, the planemaker's status has recently flipped, analysts are still cautious that Boeing still faces risks relating to the long-grounded Boeing 737 MAX aircraft.




Boeing received no new orders in May, according to initial reports and the manufacturer is expected to post fifth month of no order growth next week.


"I'm not surprised by these numbers," said Richard Aboulafia, an aviation analyst for the Teal Group. "I think we have another two years of negative book-to-bill for the plane makers."




Airlines are seeing an upgrade in booking for their upcoming July flight schedule. According to reports from various sources, an unexpected gain in U.S. payrolls is also brightening the outlook.


As reported by the CNBC, Jefferies analyst Sheila Kahyaoglu said:


"Demand has likely hit a bottom. U.S. Transportation Security Administration data shows passengers have almost tripled from the low in mid-April, although the daily totals are still down 87% from a year ago."



Boeing's market value surged by 42%.


Boeing's share surged 13% to $207.94 at 3:04 p.m. in New York, a whopping weekly gain of 42%. This weekly gain is the most on the Dow Jones Industrial Average.

This lifted the planemaker's market value to $117.4 billion, up $35 billion on the week. However, more delays in gaining approval for the safe return of the grounded 737 MAX could be a problem for shares again.




Along with delay in gaining approval for the Max aircraft, the deferrals and cancellation of orders by the customers could also be a problem for shares again.


American Airlines gave bullish guidance for capacity on Thursday boosting the entire aerospace value chain after a record advance a day earlier spurred by an upbeat July flight schedule.


The reason behind this huge surge is market share is increase in flight bookings and demand for air travel. 



Passenger number is gradually increasing in the U.S. Photo: JFKairport

On Thursday, the Transportation Security Administration screened 391,882 people at airport security checkpoints in the U.S.


This number of screening is the highest number of screenings since March 22, according to data collected from the U.S. Transportation Security Administration.

As the current crisis seemingly easing for majority of the globe and the Max edging closer to gaining re-certification from regulators, "investors see a good opportunity," said Bloomberg Intelligence analyst George Ferguson.


Manufacturer's are feeling some how better than before

Boeing, Airbus along with many of their suppliers are no longer feeling the way they were felling when as air travel was hard hit because of the pandemic.


However, the safe return of the Max is still uncertain along with it's return to a steady source of cash for Boeing. However, Boeing said that 737 Max could return earlier than midyear.


Boeing Co's best selling aircraft was grounded back in March 2019 after two fatal crashes killing a total of 346 people on board.



Before the outbreak of the corona virus pandemic, the manufacturer was expecting re-certification and safe return of the Max aircraft by mid-2020.


Sources: Boeing, CNBCBloomberg.


Do you think the Max aircraft's approval would be pushed back? When do you think the aviation industry would return to it's previous state? Feel free to share in the comments below:



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